Preview

Auto Insurance: Factors Affecting Operational Level of Planning

Good Essays
Open Document
Open Document
992 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Auto Insurance: Factors Affecting Operational Level of Planning
Auto Insurance: Factors Affecting Operational Level of Planning
Team C
University of Phoenix
MGT330
Orlando Rivero
June 20, 2005

Auto Insurance: Operational Level of Planning The insurance industry is affected by many economic factors. In an attempt to better understand the operational level of planning within the insurance industry we would like to take a look at how revenue, operating expenses, and the auto insurance market directly affect the operational level of planning of any given Auto insurance provider.
Revenue
Revenue generated by the auto-insurance industry is in the billions. According to Automotive News, the personal auto insurance business is a nearly $160 billion-a-year industry (Stoffer, 2005). Thus, many organizations, not just the auto insurance industries themselves, have generated plans for capturing this income. For instance, automotive finance companies are trying to tap into this revenue source. While, in the past, this did not meet expectations, it is still attractive to automakers. According to Stoffer, "auto industry experts predict market changes eventually will lead to consolidation of vehicle sale or lease payments with insurance premiums. The benefits would include greater convenience for customers and more business for the industry" (2005). However, for the auto insurance industry, this could lead to a loss of business, which in turn would lead to management having to come up with a plan to make up for this lost revenue. Another organization currently planning to make use of this revenue source is government. In Massachusetts, the legislature has proposed imposing surcharges on insurers that would pay for police training (Telegram & Gazette, 2005). This new fee, according to the insurance companies, would then be passed on to the consumer, resulting in higher premiums. While critics say that this training should be paid for by the taxpayer, proponents say that such police training would lead to a reduction in auto



References: Price Water House Coopers. (1999). Integrating risk and value for improved decision making . Retrieved June 15, 2005, from http://www.financewise.com/public/edit/riskm/insure/ins-pwc.htm Stoffer, H. (2005). A New Policy. Automotive News. 79. 29. Retrieved June 18, 2005, from EBSChost, via University of Phoenix Online Library. Telegram & Gazette. (2005). Auto Insurance Fees Would Pay for Training. E.1.

You May Also Find These Documents Helpful

  • Powerful Essays

    City of Kelsey Budgeting

    • 1544 Words
    • 7 Pages

    In addition to the limited budget, there has been a recent budgetary reform at the federal level, which has put additional pressure on local police agencies to use the federal money before it expires. The state Chiefs of Police Association is lobbying the state for a 15% public safety tax for a temporary 3-year period in order to make up the deficit. The state legislature and local governments are…

    • 1544 Words
    • 7 Pages
    Powerful Essays
  • Good Essays

    Learning Outcome 1: Be able to align objectives of own area of responsibility with those of own organisation – this has previously been discussed and evidence passed on.…

    • 904 Words
    • 26 Pages
    Good Essays
  • Satisfactory Essays

    Justify the value of risk plan considering the time, effort, cost, and resources it took to develop such a plan.…

    • 268 Words
    • 1 Page
    Satisfactory Essays
  • Better Essays

    Autozone Swot Analysis

    • 1473 Words
    • 6 Pages

    AutoZone’s main organizational strength has been their robust financial performance. According to Dow Theory Forecasts (2012), “Through downturns and upswings, AutoZone ($330; AZO) has delivered higher revenue for more than 20 straight years.” The company continues to increase sales and revenue. AutoZone was able to accomplish this in 2011 even with gas prices up 25% and miles driven down 1%, which would suggest the need for AutoZone’s maintenance and failure products to be in less demand. This was accomplished by offering superior customer service, products, and quality information over its competitors.…

    • 1473 Words
    • 6 Pages
    Better Essays
  • Powerful Essays

    Ishikawa

    • 1080 Words
    • 5 Pages

    Chapman, Robert J.. Wiley Finance Series: Simple Tools and Techniques for Enterprise Risk Management (2nd Edition). Hoboken, NJ, USA: Wiley, 2011. p 230…

    • 1080 Words
    • 5 Pages
    Powerful Essays
  • Better Essays

    Technical Paper

    • 2498 Words
    • 10 Pages

    Cernauskas, D., & Tarantino, A. (2011). Essentials of Risk Management in Finance. Hoboken: John Wiley & Sons, Inc.…

    • 2498 Words
    • 10 Pages
    Better Essays
  • Good Essays

    It further goes on to say that 60% reported providing even entry level driver training at their academies. Police officers need to be trained in the techniques and to know how to understand the department policy regarding high-speed pursuits. According to Dr. Geoffrey Albert of the University of South Carolina, "the well-trained officer will recognize how to temper the initial and grave feelings of contempt toward the suspect and realize that his or her most powerful tool may be to terminate a chase that has become too risky." On the other side of the spectrum, people may argue that too much money will be spent on the police training. If money is the issue then they should see how many millions or possibly billions of dollars that are paid out to victim's families in civil litigation or in medical bills. Who can really use money as an excuse when innocent people and officers are dying? It is understandable that police would pursue if there were a bank robbery and guns were blazing. It…

    • 932 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    The light-weight vehicle sector is made up of the total unit sales and leases of domestic and imported new automobiles and light-weight trucks (up to 10,000 pounds gross vehicle weight). This includes sales and leases to both consumers and businesses. More than 3.7% of America 's total gross domestic product is generated by the sale and production of new light vehicles. As the chart below illustrates, a significant rise in sales in the light-weight vehicle sector is upon us:…

    • 1511 Words
    • 7 Pages
    Powerful Essays
  • Powerful Essays

    2) Cooney, Stephen, and Brent D. Yacobucci. "U.S Automotive Industry."Www.ncseonline.org/NLE/CRSreports/05apr/RL32883.pdf. 25 Apr. 2005. Web. 25 Nov. 2010. <www.ncseonline.org/NLE/CRSreports/05apr/RL32883.pdf>.…

    • 3954 Words
    • 16 Pages
    Powerful Essays
  • Good Essays

    An analyst for the car-research site TrueCar.com, has been quoted referring to the new rules as a “win-win-win for everybody, meaning, a win for consumers, and manufacturers, as well as the environment.” However, it still appears that some will profit more than others. Some have even said that the new regulations actually represent a loss. Some examples of likely effects due to these regulations are following…

    • 1637 Words
    • 7 Pages
    Good Essays
  • Powerful Essays

    Project Title for Mba

    • 4608 Words
    • 19 Pages

    15. A study of effects of operations strategy on the business strategy of an organization…

    • 4608 Words
    • 19 Pages
    Powerful Essays
  • Good Essays

    Progressive case study

    • 817 Words
    • 3 Pages

    Peter Lewis former CEO said, “We are not in the business of auto insurance. We’re in the business of reducing the human trauma and economic costs of automobile accidents—in effective and profitable way.” He had a vision for Progressive, and thanks to his innovative and efficient way of thinking he has grown progressive from being a small insurance company from Ohio owned by his father, to the number three player in the insurance industry, raking in more than 15 billion in revenue. They achieved this competitive advantage by creating immediate response, data mining, detailed research on specific drivers, standard and preferred auto insurance, express quotes, use of the internet, and a heavy recruiting process. This new and innovative approach to a dull and boring industry created value to policyholders.…

    • 817 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Busn258 CasestudyIAS

    • 994 Words
    • 3 Pages

    Our external customers are the working-class people who are looking for a good car at a decent price. They can also be people who are looking for a good reliable starter car for their child or someone who has recently repaired credit and aren’t looking to take out a huge loan and get back in over their heads. Since we are marketing the repair aspect, they are people who are looking for a reliable garage to take their vehicles to. A place that will do the job at a good price with the quality of an auto dealer garage. And lastly, we have a contract with the local government cars. This is huge because this leads to possibly more ongoing business, we need to be dependable to them.…

    • 994 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    Since the beginning of the last century, automobile companies have fought for control of a quickly expanding market in the newly created automobile industry. Hundreds of companies attempted to secure their place in market but ultimately, only three companies remain today (Wright, 2012). The decisions, mergers, and products those three companies made is ultimately what kept them going. Starting a business and ensuring its success are two different things entirely. A successful business will recognize the need to adapt to the various pressures exerted on it from other forces.…

    • 1892 Words
    • 8 Pages
    Powerful Essays
  • Powerful Essays

    The company faced a lot of competitors and they got low profit within a year. So, to increase back their profit, they have to change their policy. In order to increase their sale, the company offer household insurance alongside car insurance. They offered household insurance because it is request by customers and only a few competitors offered this insurance.…

    • 1702 Words
    • 7 Pages
    Powerful Essays

Related Topics