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<p align="justify">CNP Assurances is a French insurance company incorporated in 1959; it is headquartered in Paris. The company operates through its offices in Europe and South America. CNP Assurances provides financial services related to insurance, loan guarantee, and group pension (CNP Assurances, 2021). They design, develop, distribute and manage personal insurance products. Their insurance division provides life insurance and health insurance. Their asset management division looks after institutional portfolios and pension funds. Its risk division offers services including personal risk assessment, term creditor and real estate loan guarantee. Their principal product is life and health insurance. It has international offices in around 17 countries and a significant insurance provider in Brazil and Argentine. Porter&#8217;s five forces model is a valuable tool to identify threats and opportunities faced by CNP Assurances in the insurance sector in the worlds.</p>
<h2 align="justify">Competitive Rivalry in The Market</h2>
<p align="justify">The financial industry in Europe is very competitive. It provides a little margin for error to competitors. Health and life insurance generate a large portion of CNP Assurances’ revenue. It has some major industry rivals in the insurance section. Those are BNP Paribas, Credit Agricole, and BPCE Vie. Around 65% percent of French have life or health insurance, which makes it mature business segment with potential for growth. The net profit of BNP Paribas and Credit Agricole are US $ 9.148 Billion (Fortune, 2021) and $5.421 Billion (Fortune, 2021) respectively. The net income of CNP Assurances’ was $1.580 Billion in the year 2020 (Fortune, 2021). CNP Assurance has an extra edge over its competitors due to its presence in other financial industries. It has a strong presence in South American countries; however, the company explores vertical expansion in domains such as property and transportation insurance. Considering the above, the financial industry is highly competitive in nature.</p>
<h2 align="justify">Threat of Substitutes</h2>
<p align="justify">Every century brings its problem and solution. The 21st century brought the internet of things with it. Technology is evolving our lives dramatically. The impact of technology on our financial institutes are visible. The industry is moving towards Fintech and Insurtech for the integration of technology with its traditional products. The use of wearable devices to monitor customer health insurance. Devices can gather better real-time data and reduce operational costs (Cap Gemini, 2017). They need to use technology to improve their products. CNP Assurances has launched a digital insurance breakage with the name of Azimut to capture the client directly. The threat is considered to be low for established incumbents as they are integrating technology with their existing products. In the longer horizon threat is moderate.</p>
<h2 align="justify">The Threat of New Entrants</h2>
<p align="justify">The insurance industry is a very closely monitored industry in the world. Regulatory bodies have their rules set for the financial market for the safety of its economy. The cost of compliance and litigation poses a massive threat to new entrants (Deloitte, 2017). 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 insurtech startups can disrupt the market runners. It requires less capital, and young people can divert toward them because of a better understanding of technology. The use of Artificial Intelligence and data can create a personalized solution for an individual. CNP Assurance is investing heavily in digitalization. The threat of the new entrant is moderate as of now.</p>
<h2 align="justify">Bargaining Power of Buyers</h2>
<p align="justify">The buyers of the financial industry are individual and business companies. The individual buyer cannot exert any power against the financial institute, whereas business companies and government institutes can claim better deals. Because the volume of purchases of the buyer is high, there are alternative sources of supply. The individual doesn&#8217;t hold any bargaining power over the company at all, and it can only benefit the product. The buyer couldn&#8217;t control if the products are specialized and unavailable in the market (HBR, 1979). A significant portion of CNP Assurance clientele is life insurance and health insurance. The individual clients bring the majority of the business to the company. CNP Assurance provides diversified products for individual, so they can&#8217;t switch to other company. The overall bargain power of buyers is moderate.</p>
<h2 align="justify">Bargaining Power of Supplier</h2>
<p align="justify">The bargaining power of the supplier depends on the supplier. The supplier is of two types. One is 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. The supplier can exert its power to integrate itself within the industry (Hill and Jones, 2012). The more prominent supplier can get better deals because of bringing more clients to the institute. The bargaining power of the supplier against financial institutes is moderate. Lending institutes hold higher power because they lend loan due diligence. Vertically integrated incumbents have access to better supply chain due to expansive network, thus are better protected against the supplier’s threat. However, suppliers can exert low to moderate bargaining power in insurance industry.</p>
<h2 align="justify">References</h2>
<p>CapGemini. (2017). Wearable devices and their applicability in the life insurance industry. Available at: https://www.capgemini.com/wpcontent/uploads/2017/07/wearable_devices_and_their_applicability_in_the_life_insurance_industry.pdf<br />
CNP Assurances. (2021). Our business. Available at: https://www.cnp.fr/en/the-cnp-assurances-group/who-we-are/what-we-do/our-business<br />
Deloitte. (2017). The Future of Regulatory Productivity, powered by RegTech. Available at: https://www2.deloitte.com/us/en/pages/regulatory/articles/cost-of-compliance-regulatory-productivity.html<br />
Fortune. (2021). Global 500. Available at: https://fortune.com/company/cnp-assurances/global500/<br />
Fortune. (2021). Global 500. Available at: https://fortune.com/company/bnp-paribas/global500/<br />
Fortune. (2021). Global 500. Available at: https://fortune.com/company/credit-agricole/global500/<br />
Harvard Business Review. (1979) How Competitive Forces Shape Strategy. Available at: https://hbr.org/1979/03/how-competitive-forces-shape-strategy<br />
Hill, J., 2012, Essentials of Strategic Management, 3rd Edition. South-Western. Available at:https://www.researchgate.net/publication/320704251_Strategic_competition_analysis_and_group_mapping_The_casse_of_the_Greek_insurance_industry#pf12</p>
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