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Final Industry Analysis Paper

In the short-term the insurance industry is

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Unformatted text preview: In the short-term, the Insurance Industry is struggling. • There has been millions of layoffs and hiring freezes • With each passing year, the industry gains strength at a slow but steady pace. • Many states are tempted to raise their revenue by increasing taxes on insurance Long-Term • The long-term outlook of the Insurance Industry is good . • Technology will play a large role • New advanced technologies will make it possible to improve insurance companies o Cloud Technology o It allows insurers to expand technology capabilities o It also lowers the entry cost for new insurers and keeps the cost low for existing users. 21 The Financial Services Industry 22 The Financial Services Industry incorporates a broad range of money management organizations. Some of these organizations include credit unions, banks, credit card companies, insurance companies, and investment funds. The financial services sector is one of the most scrutinized industries in the world because of the money involved in the industry and the wide spread greed by many financial services companies. As of now, there is much reform happening in the financial services sector that will greatly impact how each company will do business. Financial Services Revenue Return on Equity Return on Investment Earnings Per Share Market Capitalization Stock Price JP Morgan $110.9B 10.6% 4.3% $4.5 $169.7B $43.4 Bank of America $109.3B .63% 0.2% $.01 $102.3B $8.5 Citigroup $104.8B 6.4% 2.2% $3.6 $108.9B $36.5 Wells Fargo $88.3B 12.0% 6.0% $2.8 $180.6B $64.2 Goldman Sachs $36.8B 5.9% 1.8% $4.5 $64.2B $124.5 *B=Billion **Financials as of 4 th quarter 2011 ***Market Capitalization & Stock Price as of Monday April 2, 2012 Top Three Issues Facing Top Three Companies JP Morgan Problem Solution Lawsuits • The company has been sued many times over the past couple of years for what seems to be unfair, unethical, and unlawful business practices • The company needs to create a business manual stating what is acceptable business practice behavior, and what is unacceptable business practice behavior. • By doing this, they will cut down on the lawsuits and the integrity of JP Morgan no longer suffers. • In addition, they will no longer have to waste money on court fees and settlements. 23 Credit Card Collections • The government is probing JP Morgan for what they believe to be credit card fraud. • The government has found discrepancies between the records of what borrowers owed and inaccurate record-keeping by outside law firms the company used to sue cardholders • The company claims no wrongdoings in the upkeeps of their financial books. • To prove this to the government, they should have an audit done to make sure that all of their credit card information is correct in case they are sued by the government Faltering Website • As JP Morgan tried to update their website, the website went out of service on 17.3 million users....
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In the short-term the Insurance Industry is struggling •...

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