Competitive Advantage Analysis For Chinese Property Insurance Companies

An insurance Company is not an ordinary enterprise, as it runs by providinginsurance coverage.At the current stage, in the property insurance market there is substantial capacity fordevelopment, while premium growth is on the fast track. However, the developmentof the individual lines of insurances is not well balanced. The market structure ischaracterized by the fact of the co-existence of monopoly and bionopoly competition.Moreover, the property insurers' operation is rough while profitability is low. TheChinese insurers are substantially backward from the multinational in terms ofmanagement capacity, operation style, profitability, risk management capability,reformation, and capital management.According to Michael Porter's Competitive Advantage theory, by applying the valuechain methodology in connection with the particular situation of Chinese insurers,we conclude that under the circumstances of the further development of the marketeconomy with China's entrance to WTO the Chinese property insurance companieshave to undertake the following in order to achieve the competitive advantage.1. to revise the direction of the traditional value chain by focusing on customer orientation, creating market with differential service, improving service quality, and exploiting the local advantage.2. to contract the value chain by focusing on the core capability and exercising professional management.3. to re-organize the value chain and re-engineer the organizational structure by lowering the organizational hierarchy, exercising the internal management accounting, and strengthening the core competitive advantage.4. to establish an electronic value chain based on information technology.The Chinese property insurance companies are bound to have wonderful future withcorrect strategy and firm implementation by strong teams.