Understanding the industrys customers through customer research is an

Understanding the industrys customers through

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Understanding the industry’s customers through customer research is an opportunity for firms. The understanding of the customer can strengthening a company’s existing position and ensuring its readiness for any dynamic changes in the internal and external business environment. Effective customer research becomes crucially important from the perspective of reaching a target customer. The first important component from the target customer reach perspective suggests that advances in marketing channels and metrics may help insurance companies to identify more potential customers in target markets. Secondly, demographic changes can result in potential changes in the customer requirements related to various insurance products and services. For example, the increased desire of a particular demographic to consider various insurance policies as an effective way of mitigating risks can be exploited if it is identified by the firm. Lastly, social media can have a significant impact on customers. Social media as a tool can be used to effectively reach customers and identify trends in customers’ wants and desires. Embracing social media as a tool to reach customers provides the opportunity to communicate and receive feedback directly from the customers. Threats in the Industry There is a variety of factors that are considered threats in the United States insurance industry. Threats including: (a) insurance regulations, (b) competitive rivalry, (c) data security, (d) domestic economic uncertainty are paramount. The threats faced by the insurance industry
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ALLSTATE INSURANCE CORPORATION CASE ANALYSIS 19 have a significant influence on the industry’s profitability. A firm such as Allstate Corporation that operates in the insurance industry is has to find it necessary to identify and manage threats. The regulations that govern the insurance industry are intended to protect the consumers and require strict compliance by those firms operating in the insurance industry. The insurance company and the insurance products and services are subject to regulations by the state in which it operates from. A lack of compliance with market regulations can be met with penalties that range from civil penalties to license revocation[ CITATION Nat16 \l 1033 ]. As all aspects of the insurance industry are regulated, the potential to run afoul of the regulation exists. Additional threats from regulations come in the form of mandates, monitoring and recommendations offered by entities formed by the federal government. The Federal Insurance Office (FIO) is such an entity that advises various agencies on all aspects of the insurance industry[ CITATION UST13 \l 1033 ]. As monitoring the effects of availability and affordability of the car insurance on underserved or low-income communities is a charter of the FIO, recommendations that result in federal legislation that require low cost insurance products and services threatens the insurance industry.
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  • Fall '18
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