Sampo Group SWOT and PESTLE Analysis

Strength

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Weakness

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Opportunity

1. Rise of sharing economy: Sharing economy is a rapidly emerging consumer practice that could impact the insurance industry. Sharing platform revenues are expected to grow to $ 335 billion by 2025. This concept of sharing economy has given rise to companies like Uber and Airbnb. In these types of businesses, there is a great need of special insurance policies as the regular policies for homes and vehicles do not cover commercial activities like renting out homes or becoming an Uber driver using your personal vehicle. New business models like pay-per-use insurance and peer-to-peer insurance are great opportunities for insurance companies to come up with innovative products and practices to cater to the changing insurance requirements. The Nordic countries are among the leading acceptors of sharing economy. A PwC research in 2017 has predicted the Finnish sharing economy to grow 1200% by 2020. Sweden, Norway, Finland and Denmark are known for their social care, tech-friendly perspectives and hospitality and this has led to sharing businesses like Uber and Airbnb becoming popular quickly in these countries. Stockholm, the capital of Sweden, is the fourth international city in terms of Uber users. The presence of Sampo companies in all the Nordic countries is an excellent opportunity to roll out innovative insurance products in these countries to cater to the needs of the sharing economy.

2. Advancements in technologies: Data analytics can be used to improve customer experience by accurate profiling of customers to offer them customized insurance products. Technologies like IoT, blockchain and predictive analytics also offer new opportunities for insurance companies. Blockchain, for instance, can help in improving customer engagement by addressing customer concerns about losing control of data provided to companies. This can be done using a customer controlled blockchain to perform identity verification. Smart homes, connected cars and wearable devices are potential disruptors, offering competitive advantage for early movers. The Nordic countries are known to be tech-friendly and their people embrace new technologies quickly, which would make it easy for Sampo companies to introduce new products and services based on new technologies.

3. Emerging markets: The growing GDP in emerging markets of China, Brazil, Russia, India, Indonesia and Mexico has provided attractive new markets for insurance companies, in contrast with developed markets that are still feeling the after effects of the 2008 financial crisis. The above mentioned six emerging markets are expected to contribute 47% of global GDP growth between 2006 and 2020, whereas the G6 countries of US, United Kingdom, France, Germany, Canada and Japan would contribute only 24%.

4. Demographic shifts in developed countries: The ageing populations in the developed world provide new opportunities for insurance companies to come up with retirement income products, longevity insurance and long term care products. The developed countries also face increasing dependency ratio which will strain government support for sick and elderly people, leading to reduced standard of living or prolonged employment, opening up opportunities for insurers to form public-private partnerships to provide solutions to the challenges. Europe in general has seen an increase in the old age dependency ratio from 25.2% in 2007 to 29.3% in 2017. In Nordic countries, the increase in dependency ratio has been faster than the rest of Europe. This increase is largely due to influx of older immigrants into these countries. The proportion of people in the working age group has either remained constant or declined in this region. This is a great opportunity for Sampo to introduce products and services targeted at retired people.

Threat

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Political

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Economic

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Social

1. Balance of power moving from companies to customers: The rise of online and mobile technology is leading to more and more customers demanding simple and transparent transactions with insurers. Insurance is increasingly being ‘bought’ by customers instead of being ‘sold’ by agents. The increasing demands are an opportunity for insurers to come up with innovative products to satisfy needs of specific customers. The rise of social networks is leading to people trusting their network more than insurance agents. This is an opportunity for Sampo to invest in social media marketing to reach out to its target market. Nowadays people rely a lot on online reviews so Sampo companies can have a platform where they can invite their customers to post reviews about the company.

2. Demographic shift in developed countries: The ageing populations in the developed world provide new opportunities for insurance companies to come up with retirement income products, longevity insurance and long-term care products. The developed countries also face increasing dependency ratio which will strain government support for sick and elderly people, leading to reduced standard of living or prolonged employment, opening up opportunities for insurers to form public-private partnerships to provide solutions to the challenges. Europe in general has seen an increase in the old age dependency ratio from 25.2% in 2007 to 29.3% in 2017. In Nordic countries, the increase in dependency ratio has been faster than the rest of Europe. This increase is largely due to influx of older immigrants into these countries. The proportion of people in the working age group has either remained constant or declined in this region. This is a great opportunity for Sampo to introduce products and services targeted at retired people.

3.Rise of sharing economy: Sharing economy is a rapidly emerging consumer practice that could impact the insurance industry. Sharing platform revenues are expected to grow to $ 335 billion by 2025. This concept of sharing economy has given rise to companies like Uber and Airbnb. In these types of businesses, there is a great need of special insurance policies as the regular policies for homes and vehicles do not cover commercial activities like renting out homes or becoming an Uber driver using your personal vehicle. New business models like pay-per-use insurance and peer-to-peer insurance are great opportunities for insurance companies to come up with innovative products and practices to cater to the changing insurance requirements. The Nordic countries are among the leading acceptors of sharing economy. A PwC report in 2017 has predicted the Finnish sharing economy to grow 1200% by 2020. Sweden, Norway, Finland and Denmark are known for their social care, tech-friendly mentality and hospitality and this has led to sharing businesses like Uber and Airbnb becoming popular quickly in these countries. Stockholm, the capital of Sweden, is the fourth international city in terms of Uber users. The presence of Sampo companies in all the Nordic countries is an excellent opportunity to roll out innovative insurance products in these countries to cater to the needs of the sharing economy.

Technological

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Legal

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Environmental

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