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<p align="justify">MS&;AD Insurance Group is a Japanese Insurance group. It is headquartered in Tokyo, Japan. It is formed in 2008 as a holding company. It was formed with the merger of Aioi Insurance Co., Ltd., Nissay Dowa General Insurance Co., Ltd., and Mitsui Sumitomo Insurance Group (MS&;AD, 2021). It provides services through its multiple subsidiaries. Which includes its core business divisions are insurance and investment management. It has the following segments: Domestic Non-Life Insurance Business, Domestic Life Insurance Business, International Business, and Others. It is enlisted in Tokyo Stock Exchange and Nagoya Stock Exchange. Porter&#8217;s five forces model is a valuable tool to identify threats and opportunities faced by MS&;AD in the insurance sector in the world.</p>
<h2 align="justify">Competitive Rivalry in The Market</h2>
<p align="justify">The insurance industry in the world is very competitive. The competition means that there is little margin for error. The integrated insurance holding companies hold the majority of the share in the market. The primary rival of MS&;AS&#8217;s is Tokio Marine Holdings, Inc., and T&;D Holdings, Inc. All of these companies provide insurance, financial asset management services, and products around the world through their subsidiaries. The revenue of Tokio Marine Holdings, Inc., and T&;D Holdings, Inc. are $48.832 Billion (Nikkei Asia, 2021), and $20.121 Billion (Nikkei Asia, 2021). MS&;AD posted an annual revenue in the same fiscal year of $46.083 Billion (Nikkei Asia, 2021). MS&;AD faces tough completion in the market due to the presence of other major companies. MS&;AD has a slight advantage over the competitor is due to its more extensive clientele and multiple products. It caters to individuals, corporate companies, and the government. Considering the above, the financial industry is highly competitive.</p>
<h2 align="justify">Threat of Substitutes</h2>
<p align="justify">The insurance companies provide the standardized product. The financial industry is evolving with time. The life insurance industry&#8217;s revenue is declining for almost the last 2 years in the region. It is because of the change in household composition (T&;D, 2018). This side of the industry needs a new product to keep its clientele intact. Industry can use technology to evolve itself. As financial institutes are doing all over the world. Fintech and insurtech are the future of the financial industry. Industry runners as developing tools with the help of machine learning and artificial intelligence to provide a customized and better solution for the client. The threat of substitutes is moderate in the industry. MS&; AD is applying the technology to produce algorithms that can help businesses to analyze the situation in a better way. Ristech is one of their tool, which can be used to analyze the risk by using data through the analytical algorithm.</p>
<h2 align="justify">The Threat of New Entrants</h2>
<p align="justify">The financial industry is strictly regulated all over the world. It is due to the sensitivity of the industry and the dependence of the country&#8217;s economies on it. The regulatory authorities set their rules to protect the economies from the crisis. Such as the financial crisis of 2008. The higher initial cost and high sunk investment make it difficult for a startup to compete with established insurance companies. The major products in the insurance industry are pretty much the same. The financial industry has been evolved rapidly after the dawn of the 21st century. The insurtech can pose a serious threat to the business. It will not be able to take over the industry but it can be used as a tool. It can help the companies to cover ground against the rival. MS&;AD partnered with German Insurtech Company ELEMENT through its subsidiary Mitsui Sumitomo Insurance Co. (MSI) for support and development of digital solutions (Reinsurance, 2019). The startups can affect the overall business profit. The threat of new entrants is at a low level.</p>
<h2 align="justify">Bargaining Power of Buyers</h2>
<p align="justify">In the insurance industry, the buyers bargaining power remain moderate to low. The usual buyers of financial products are retail customers, corporations, and government institutes. The individual buyers are individual end-users of the product, whereas companies are the retailer or wholesalers (Hill and Jones 2012). The individual buyer has a limited purchase cap and it makes them weaker. On the other hand, corporate clients and government institutes can claim better deals. Their purchase the product in bulk and companies provide long term contract. It gives them a bargaining chip in negotiations. MS&;AD lend financial supports to all sort of clients. It has a diversified clientele that includes individuals, startups, government entities, and corporate institutions. The bargaining power depends upon the type of buyer although the overall bargaining power of buyers is moderate.</p>
<h2 align="justify">Bargaining Power of Suppliers</h2>
<p align="justify">Suppliers in the insurance industry are mainly of two types. The agent and brokerage firms that bring human capital and corporate clients to the insurance company. The other one is the lending institutes, which provide funds in case of payment. Suppliers can reduce the profitability of the industry by raising prices or reducing the quality of the products and services (Magoutas. 2017). Lending institutes hold higher power because they lend loan due diligence. Suppliers can exert power if the market has fewer suppliers and it has clients under him. The brokerage with the better distribution network can use it is has a bargaining chip. Overall, the bargaining power is low.</p>
<h2 align="justify">References</h2>
<p align="left">Hill, J., 2012, Essentials of Strategic Management, 3rd Edition. South-Western,<br />
https://www.researchgate.net/publication/320704251_Strategic_competition_analysis_and_group_mapping_The_case_of_the_Greek_insurance_industry#pf12<br />
https://www2.deloitte.com/us/en/pages/regulatory/articles/cost-of-compliance-regulatory-productivity.html<br />
Maguotas, A. et al, (2017). Strategic competition analysis and group mapping: The case of the Greek insurance industry. Available at:<br />
MS&;AD. (2021). Company Overview. Available at: https://www.ms-ad-hd.com/en/group/about/hd/outline.htm<br />
Nikkei Asia. (2021). Finance &#8211; MS&;AD Insurance Group Holdings, Inc. Available at: https://asia.nikkei.com/Companies/MS-AD-Insurance-Group-Holdings-Inc<br />
Nikkei Asia. (2021). Finance &#8211; Tokio Marine Holdings, Inc. Available at: https://asia.nikkei.com/Companies/Tokio-Marine-Holdings-Inc<br />
Nikkei Asia. (2021). Finance -T&;D Holdings, Inc. Available at: https://asia.nikkei.com/Companies/T-D-Holdings-Inc<br />
Reinsurance. (2019). MS&;AD enhances digital capabilities with new partnerships. Available at: https://www.reinsurancene.ws/msad-enhances-digital-capabilities-with-new-partnerships/<br />
T&;D. (2018). T&;D Holdings Annual Report 2018. Available at: https://www.ms-ad-hd.com/en/group/about/hd/outline.html</p>
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