Rbc Insurance Industry Case Analysis

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RBC first established its insurance platform in the early 1980s where it promoted creditor and basic travel insurance, as those were the few products that can be promoted by bank employees under Canada’s Bank Act. Through the acquisitions of various insurance companies, they eventually entered the life, health, property and casualty insurance markets; demonstrating significant growth in the industry and eventually being level in the playing field among other large insurance competitors (McLaren, Babin, & Schuster).
Despite achieving nearly 20% growth annually consistently throughout the years, RBC was challenged with sustaining the growth as it competed with other financial institutions and emerging competitors
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Firstly, the threat of new entrants is relatively low due to the high start-up costs and other resources to logistically operate an insurance company. RBC’s long history and establishment in the financial industry benefited them when they acquired other insurance companies to build their portfolio.
While there are not too many insurance companies in Canada, this gives RBC a competitive advantage, as they are able to customize packages for an individual for example, something that is competitive with the market. Because there is a lower supply of insurance companies, the supplier bargaining power is high in this case. RBC has as extensive portfolio for insurance types ranging from travel, auto, contents, home, life and disability insurance; furthermore strengthening their competitive advantages compared to other insurance companies who may not offer the same insurance types, or at a special premium. Another example that demonstrates RBC’s high bargaining powers is its ability to cross or up sell other packages to meet the needs of existing customers when it uses its customer service or call centre, as mentioned in the
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