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National Allotment Insurance Agency: Main Pluses An Minuses Of The Company

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ABSTRACT

This paper is a SWOT Analysis of the National Allotment Insurance Agency. As an insurance agency created in the 1970’s to serve the needs of many diverse companies in the US, its key roles include designing and administering Employer/Union sponsored benefit policies. National Allotment SWOT analysis indicate that the company’s strengths include well trained staff and a good system to admit interns that are later absorbed as employees, comprehensive customer insight, thereby and it’s are here to guide the firm’s location in New York gives the company an opportunity to engage in diverse business opportunities, hence the growth. The agency has limited clients and few workers and has to compete with other big insurance agencies. With a good SWOT analysis, the company is in a better position to use its strengths to take advantage of opportunities work of weaknesses and reduce on the massive threats. The location in New York gives the firm a chance to diversify its products and services and reach the huge market.

Introduction

National Allotment Insurance Agency was created in the 1970’s to serve the needs of many diverse companies in the US. The company’s key roles include designing and administering Employer/Union sponsored benefit policies. More so, the company has many years of experience, hence the expertise to offer information on a wide range of insurance plans and benefits to all types of employees for companies (Jackson et al. 2003). The company has established strong associations with the country’s prestigious insurance carriers that have the best performing rates, allowing them to meet the customized needs of every client. As an innovative leader in insurance, particularly employee benefits, the company is under the good leadership of Samuel Dunston that has received numerous awards for his continued activities in the insurance industry among minority-owned companies (National Allotment Insurance Agency, n.d.).

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According to Hitt et al. (2012), for a company to succeed, it is important to understand its strengths, weaknesses, opportunities and threats that entail the external and internal environment. Having a full awareness of the situation can help the company to develop a strategic plan and make precise decisions concerning the business. SWOT method was developed to serve the businesses operating in various industries, but can as well work well for NGOs, education and personal growth of an individual. Despite not being the only assessment technique to use, it is proven to have a long record of success in terms of effectiveness and efficiency (Jackson et al. 2003). Hitt et al. (2014) explain that SWOT analysis can help National Allotment Insurance Agency explore new opportunities for business and solutions to existing problems. More, so, it can help the company make decisions concerning the best path for set objectives and initiatives and identify opportunities that assure success while using the threats to clarify business decisions and directions.

SWOT analysis is essential to help the Insurance Agency determine areas that need a change in relation to a turning point, change of business strategy depending on the strengths, weaknesses, available opportunities and existing threats to the current business. With a well-analyzed SWOT, National Allotment has a chance to refine its plan in the middle of a financial year, in case a new opportunity arises, with the possibility of a new threat closing a path that once was open for business. As indicated SWOT analysis relies on four elements of strength, weaknesses, opportunity and threat as shown in the acronym SWOT, but the graphic format can vary depending on the depth, as well as the complexity of the company (Hitt et al. 2014).

Accordingly, SWOT serves the purpose of identifying positive forces that relate well and potential issues that must be solved or identified. Before performing a SWOT session, it is essential to decide what layout to use in communicating issues in the most precise way. For instance, strengths represent the positive internal features of a company in tangible and intangible form (Hitt et al. 2012). The Insurance firm can identify what it does exceptionally well to know where to invest their resources and be assured of value. Insurance business just like any other requires proper management, planning, control, motivation and organizational skills. Insurance activities are affected by the entire replenishing process, thus the need for the insurer to understand the risk management as a necessary precondition to support the efficient functioning of the system and the attached financial obligations. It is an attribute under the control of the company, thus the need for National Allotment Insurance Agency to know its strengths in the insurance field.

INTERNAL ANALYSIS

Strengths

Like for most insurance agencies, National Allotment Insurance Agency’s strengths are in the high number of customers who have signed up for the insurance covers. In this regard, the agency can make a lot of profits from the existing/returning clients who are always ready to buy the insurance covers. Moreover, the use of information technology and the internet has made it easier for the company to reach out to many willing and financially stable clients (Oak, 2003). Some of the company’s strengths include having a well-trained staff, with a good program to train interns that are then offered employment opportunities in the company later on. Having well-trained staff has ensured National Allotment workers have high morale and job satisfaction (National Allotment Insurance Agency, 2010). High morale has boosted staff input reflected in the profits recorded by the company every year. More so, the culture of recruiting interns has ensured the company has established training and development programs that have helped improve worker performance and in turn enhancing efficiency and effectiveness. Training has also improved employees confidence in their role. With better training, the company has the best processes among competitors, allowing tasks to be performed fast because employees understand their roles; hence quality work processes (National Allotment Insurance Agency, 2010). Well-trained employees add value to the company, with well-laid strategies to promote workers from within including those on internship.

The National Allotment has been in existence since 1970’s hence the comprehensive customer insight, with employees understanding their clientele well, their needs and how to satisfy their needs (National Allotment Insurance Agency, 2010). Customer insights have helped the company understand the “what” and “why” using the available transactional data to see if there are any customers that have left and why. Understanding the purchase behaviour of employers when they buy schemes for their employees’ help the company knows whether to advise the client on the need to upgrade the package explaining the benefits of doing so. It is also the best way to win over the toughest and most significant employees that always appreciate the one on one and customized service (National Allotment Insurance Agency, 2010). Customization has been the major strong point for the company, with the ability to serve a client as an individual but not in a group leading to a close relationship. Through the close relationship, National Allotment has been able to get referrals from existing clients (National Allotment Insurance Agency, 2010).

Accordingly increased customer insights have encouraged personalization, with the Agency able to send tailored information to specific clients depending on their needs using particular information such as age, gender, and income. It is important when it comes to insurance plans for employees as provided by the employer. Hitt et al. (2014) assert the combination of business intelligence with behaviours, attitudes, and demographics of a client helps in developing customized plans that serve the needs of different customers differently. It has also helped National Allotment become a trendsetter in the industry and not just a follower, hence the competitive edge it has over the competitors (National Allotment Insurance Agency, 2010). It is essential for the company to revaluate its customer segmentations by referring to the past, present and future profiles and develops products that meet the profiles. In the insurance industry, it is essential for one to anticipate trends, because it helps understand what customers say, thereby serve them in the most appealing way (Jackson et al. 2003).

The Agency being established in New York gives it a competitive edge. The company has access to multiple of organizations willing to change, start or add insurance schemes for their employees. With enough marketing and awareness, National Allotment has the ability to access a huge market. Since the Agency has been offering customized service, it is not hard to recruit new clients in a huge market such as New York (National Allotment Insurance Agency, 2010). The experienced business units have an upper hand of reaching new and potential clients in the city, based on the company’s good and strong presence.

Weaknesses

Apart from the strengths, National Allotment has numerous weaknesses that represent its internal attributes negative in nature, with the ability to deny it a competitive advantage. Like most agencies, the National Allotment still relies on the use of agents who may not be able to bring more clients which leads to loss of revenues (Oak, 2003). Hitt et al. (2012) explain that a firm has to identify factors that prevent it from attaining competitive advantage, in addition to understanding essential elements lacking when compared to competitors. Even though National Allotment has a considerable amount of clients, the numbers are limited compared to other agencies. An example includes Shield total insurance that has a larger customer base because of its decision to handle numerous portfolios that suit employees from the small, medium and large sector (National Allotment Insurance Agency, 2010). National Allotment can adopt the same strategy and become a follower, but the best decision is to identify themselves with one or two unique employment schemes, market them well and ensure increased recruitments, hence turning the weakness into a viable opportunity and later on strength (Hitt et al. 2014). The fact that the company is small with few employees does not prevent it from expanding having relocated to such a diverse city of New York (National Allotment Insurance Agency, 2010). The firm has also failed to expand their products in terms of diversity making it hard to compete with other bigger agencies.

EXTERNAL ANALYSIS

Opportunities

Opportunities, on the other hand, represent the external attractive aspects that a company can adopt to prosper (Hitt et al. 2012). The positive elements are detected by selecting attractive factors, from which the current business can benefit from in the industry. There are still many employed and businessmen who are capable of buying the wide range of insurance policies offered by the National Allotment Insurance Agency. Other policies available include life cover and broker covers (National Allotment Insurance Agency, 2010). According to Jackson et al. (2003), currently, every employer is required by law to provide an employee with a benefit and medical scheme. Without a doubt, such laws provide National Allotment with numerous opportunities to get many employers on board by offering the best schemes. Having been on the market for quite a while, National Allotment can strategize and identify markets that best work for it and recruit numerous companies on board thereby growing its market base. Conventionally, the company is located in New York, one of the most diverse markets in the US (Hitt et al. 2012). The city provides the Agency with an opportunity to identify various sectors and industries that suit their tailor-made products and expand its market base.

The fact that the company has been in existence since the 1970s gives it an opportunity to decrease its fixed costs on the growing client base. The market base can also give the company venture capital opportunities, thus the need to expand the business vertically (Hitt et al. 2012). Similarly, Hitt et al. (2014) explain that the US economy is currently doing well, with National Allotment having an opportunity to take advantage of it and recruit more employers that have recorded increased profits and look forward to motivating employees through the introduction of benefit employee schemes.

Threats

Threats represent external factors, which a company has no control over, yet it has a negative impact on its operations (Osuna and Aranda, 2007). Threats can prevent a company from attaining their strategic plans, hence facing the possibility of failure. Nevertheless, companies can benefit from the threats by responding to them head on and in an effective manner through proper planning and problem-solving and analytical skills. National Allotment has the upper hand because it boasts of qualified, confident, well-trained and committed staffs that have the ability to find solutions to the threat. Hitt et al. (2014) explain that New York provides a diverse market and to move away from threats the company has an opportunity to introduce new products and services vertically and horizontally to eliminate the risk of redundancy and lack of profitability.

Jackson et al. (2003) explain that major threats that National Allotment if facing currently includes the increased global economy competition, negative tax reforms introduced by the current regime, and the increasing labour costs. Osuna & Aranda (2007) assert that on increasing labour costs, the company has the upper hand because of its strategy of accepting interns and promoting them to permanent posts. It saves the firm the stress of having to go to the market and poach expensive and experienced workers because they have the ability to train their own. Another threat however includes the harsh economic conditions such as global recession that negatively impact operations.

Recommendations

Just having a SWOT analysis is not enough, if the company fails to develop strategies’ that ensure SWOT adds value to the company (Hitt et al. 2014). National Allotment can strategize and identify markets that best work for it and recruit numerous companies on board thereby growing its market base and counter competition. Conventionally, the company is located in New York, hence an opportunity to diversify, despite the stiff competition. The city provides the Agency with an opportunity to identify various sectors and industries that suit their tailor-made products and expand its market base. The company has to engage many new companies across New York and provide customized employment plans for workers to ensure they increase their market and grow in terms of value and business (Osuna & Aranda, 2007).

Conclusion

With an enhanced SWOT analysis, National Allotment has a great potential for growth, as long as management and all employees remain vigilant to take advantage of the slightest opportunity that comes their way. As indicated, the company can use its well-trained employees, and the many years it has been in the market to analyze markets and solve problems and threats that come their way. The fact that the company is located in New York gives it an upper hand in the way of diversifying in the different markets that the city provides. Moreover, National Allotment needs to take advantage of the labour laws that require employers to have medical and other employment benefit plans for their employees. It should remain aggressive in marketing and advertising, increase awareness of what they offer to expand their market base.

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