Entry stratey Entry stratey wi hine on the unišue —rontier markets can enefit from increased articiation of internationa insurers… characteristics of each market‡ oth in terms of underwritin caacity and technica exertise‡ ‘ critica šuestion when considerin enterin a new market is the feasi iity of oin in aone… in artnershi with a oca carrier or acšuirin an existin oca firm‡ ˆhe choice is continent on oca reuatory reimes… in articuar with reards to forein ownershi‡ ˜any emerin and frontier markets sti have restrictions on forein entrants throuh rešuirements on maximum forein sharehodins or “oint venture rešuirements‡ Even some esta ished emerin markets retain certain restrictions‡ ‘cšuirin a oca ayer can he the ‘ entry routes have advantaes and associated risks‡ Žome insurers are rowin incomin forein insurer to “hit the oranicay as we as throuh acšuisition in frontier markets… as ‘ianŠ… for exame… round runnin”‡ has done to increase its resence in ‘sia… the ŒEE and ›atin ‘merica‡ ”ther exames are ‘»‘’s recent acšuisition of ™1 stake in Œoatria’s insurance ¡¡ oeration in Œoum ia and ƒrudentia’s acšuisition of ¥andan comany €odstar ›ife ‘ssurance‡¡4 ‘cšuisition of existin insurers rovides forein insurers an aready† esta ished atform in the oca market… which aows them to “hit the round runnin”‡ £owever… a startin chaene is that the insurance sectors in emerin markets tend to e reativey concentrated… and the est erformin insurers are ess ikey to e u for sae‡ ‘ more reaistic aroach is to acšuire a medium†siŠe second tier ayer with otentia for imrovement‡ ‰ut then interatin the new comany into the insurer’s o a oerations resents further chaenes… such as deain with eacy ortfoios and roer vauations of oca assets… articuary in view of the innate voatiity of smaer markets‡ §oint ventures and distri ution §oint ventures with oca artners or tie†us with distri ution networks can aso e artnershis are often emoyed to used to esta ish a resence in emerin and frontier markets‡ ˆhis otion rovides ta existin distri ution caa iities‡ the forein entity a stron oca rand name… market exertise… oca skis to tacke ocation†secific o staces more smoothy… and wide consumer reach‡ ‘»‘’s move ¡™ into Indonesia and ˜aaysia … and ¹urich Žantander’s ife distri ution arranement ¡6 in ›atin ‘merica are exames of o a insurers everain oca artners to esta ish themseves in new markets‡ £owever… in this mode the forein artner sti faces interation chaenes inked to cutura differences and ease of doin usiness‡ ‘t the same time… the strateic interest of the oca artner can divere from that of the forein artner… creatin deay in decision makin and otentiay erosion of rand vaue‡ 33 Ž to c‘uire „ƒ’ o Œolpatria’s Insurance Operations and Enter the Œolombian arket, 11 Novem er 201¡… ‘»‘… htt://www‡axa‡com/i /en/i rary/r/rou/201¡/144¢‡asx 34 Prudential plc ac‘uires Goldstar ”ie ssurance in •ganda… 2¡ §une 201™… ƒrudentia… htt://www‡rudentia‡u/media/ress†reease/201™†06†2¡/¡26/ 35 Ž and bank andiri in –oint —enture to develop General Insurance ˜usiness… ‘»‘… ‘ri 2011… htt://www‡axa†ins‡com‡cn/™2¢/en/±now†us†‰etter/‘»‘†News/‘»‘†and†‰ank†˜andiri†in†§oint† ªenture†to†deveo†€enera†Insurance†‰usiness 36 ™urich and antander announce longterm alliance in ”atin merica… 22 —e ruary 2011… ¹urich —inancia Žervices €rou… htts://www‡Šurich‡com/en/media/news†reeases/2011/2011†0222†01 Swiss Re sigma No 2/2016 2™
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