MKT3031 - Entrepreneurial Strategy Report: Covea Insurance

This report provides an analysis of Covea Insurance's entrepreneurial and intrapreneurial strategies within the UK insurance market. It identifies issues such as poor customer service, the impact of COVID-19, and rising inflation. The report includes a situational analysis covering internal capabilities, financial performance, business structure, marketing, HR policies, and stakeholder analysis. An external analysis using PESTLE and Porter's Five Forces frameworks assesses the market environment. Key strategic options involve partnerships for technological advancements and new product development. The report recommends focusing on customer service and forming partnerships with big data analytics companies to enhance competitiveness and sustainability. Ultimately, the report emphasizes the importance of innovation and diversification for Covea Insurance's continued growth.

MKT3031
Entrepreneurial Strategy
Report on Covea Insurance
entrepreneurial strategy
Name of the student:
Student ID:

Executive summary
The purpose of this report: To analyse the entrepreneurial and
intrapreneurial strategies of Covea insurance and recommended future pathways
to follow
Problem statement: Covea insurance is a major insurance company which has
lost some of its footing in the market due to poor customer service, scaling of
claims due to COVID-19 and rising inflation in UK
The company overview: Covea insurance is a UK based subsidiary company of
the Covea group which was formed through a three way merger and provides a
variety of insurance based product’s ranging from vehicle protection to personal
insurance
Situational analysis brief: The detailed external analysis of the company
indicates that the insurance industry is in unpredictable waters right now due to
the pandemic and rising inflation and regulatory compliances and in order to
take advantage of opportunities, Covea must employ better strategies
Key strategic options: The report suggested two major ways in which Covea
can improve its business, on being through partnership with businesses that can
help it undertake complex technological systems such as big data analytics and
to make better life insurance products
Recommendations: Covea insurance was recommended to form partnerships
with emerging big data analysing companies and to also focus on impeccable
customer service which removes the element of complaint.
Conclusion: It was ultimately concluded from the report that in order for Covea
insurance to keep growing at a sustainable rate in UK’s insurance industry, it
must look into new product development and also focus on more diversification
of its insurance product line-up

Contents
Introduction............................................................................................5
MAIN BODY.............................................................................................5
CONCLUSION.......................................................................................14
List of references.................................................................................15

REPORT
To: Managing Director, Covea insurance company
From: Mr Justin Smith,
Date:
Ref: Report on Covea Insurance company's entrepreneurial strategies and
recommendations

Introduction
In order to be successful in today's rapidly competitive business world,
one has to make sure that their entrepreneurial strategies and the way
they establish new product lines with intrapreneurial policy making and
operations are top notch (Gans, Stern and Wu, 2019). This report will
present a comprehensive internal and external analysis of Covea
Insurance utilizing a variety of strategic management models and
frameworks to develop strategic objectives for the company to become
more competitive and profitable in the insurance sector of UK.
MAIN BODY
1. Overview of the organisation
The Covea group is a French mutual insurance providers who
specialize in property and liability protection and they were formed
through the merger of three separate companies which were all separate
insurance concerns in France being Garantie Mutuelle des
Fonctionnaires (GMF), Mutuelle d'assurance des artisans de
France (MAAF) and Mutuelle du Mans Assurance (MMA). The Covea
Insurance PLC was formed under the group in UK also through a merger
of three locally based insurance companies, Provident, MMA and
Gateway insurance and since then the company has grown a lot to
establish a clientele worth more than million policy holders and also a
workforce exceeding thousands. The current progress of the company is
also very robust as it has multiple offices and it building innovative
products in the field of insurance.
2.1 Problems
The firm has been suffering from various service related issues
which have resulted in its public perception taking a beating as multiple
trusted review and critic websites are filled with complaints in regards to

sloppy customer service (Criado-Gomis, Iniesta-Bonillo and Cervera
Taulet, 2018). Most of the complaints have been directed towards the
poor communication routines the company follows with special regards
to the motor insurance department consisting of lousy engineers. The
company has also been suffering from the advent of the COVID-19
pandemic and the rising inflationary trends in the UK economy which has
resulted in slumps in relation to profits.
2. Situational analysis (internal environment)
A situational analysis involved a detailed overview of a firm's
internal capability and resource assessment. It has been listed herein in
context of Covea Insurance
2.1 Organisational current entrepreneurial and intrapreneurial
strategies
The insurance sector in UK although lucrative is very dangerous to stay
consistently sustainable in due to the unpredictability of the variables
involved which makes the existence of a robust entrepreneurial and
intrapreneurial strategies all the more important (Di Biase and Onorato,
2021). The current strategies of the company are listed herein.
Entrepreneurial strategy
 Developing a new niche in e-trading insurance using strategic
partnerships to strengthened the business domain such as the one
with Insureit UK
 Making entirely new product lines which are supposed to extend
the portfolio of the company such as the Business excel combine
Intrapreneurial strategy
 Developing better internal capability to make the company more
technically advanced by hiring talent in the area of technology
 Making the business more innovative and productive through
inclusion tactics such as participating in LGBTQ insurance network
charities and developing a digitized workplace

2.2 Financial analysis
Despite the COVID-19 pandemic raging havoc on the UK economy
and making the claims originating from property damage and health, the
firm did well in the year of 2021 as the projected claims were higher in
major aspects compared to the previous financial year. However some
problems still remain as the pandemic and inflation are eating profits and
the customer service and public image is also not as robust as it should
be (COVEA INSURANCE PLC SOLVENCY AND
FINANCIALCONDITION REPORT, 2021)
2.3 Business structure
Since insurances are a tricky field to conduct business in, the
overall structure that the company follows is very traditional in top to
down flowing hierarchy. The company's CEO, James Reader is the first
man in charge who is followed by Adrian Furness who is the CFO. The
company also has high level directors and senior managers in the field
of both technology and commercial lines which are in charge of their
respective departments.

2.4 Marketing and sales/Digital marketing
The marketing of the company is driven by both offline and online
methods and the company manages to post optimum and promising
sales figures year after year due to the diverse portfolio of services
which ranges from commercial business services and motor along with
health which helps the firm cater towards a lot of varied market
segments which is a major reason behind its success
2.5 HR policies
When it comes to the HR policies of the firm, they are quite robust
and the department has more than 20 employees and falls under the
watchful eye of Lisa Meigh who is the people director of the company.
The HR policies are entirely employee oriented and focus on making the
workplace diverse and inclusive and also supporting them by enabling
remote and smart working facilities (Klotzki, and et.al., 2018)
2.6 Product and pricing
Covea insurance has built its prestigious brand name on the back
of its insurance service portfolio whose various offerings are listed
below.
 Personal products – These include motor and home based
insurances in which traces worth 5000 pounds are given and
personal accident of private car worth 5000 pounds are major
offerings Commercial products – This is one of the most popular form of
product which the company specialized in and involves various
insurance based products and services for businesses including
mid-market firms and SME’s (An Overview Our products &
services, 2022)

 High net worth products – This product offering of Covea aims to
provide cover and monetary compensation in case of harm to
goods which are of pristine value
 Life and protection products – This provides protection from
critical illnesses and motor and accident cover
2.7 Stakeholders’ analysis
This strategic management framework is used to assess and
identify the various stakeholders of a company in terms of their
importance and setting their priority for the firm. This has been applied
beneath in the context of Covea insurance wherein the stakeholders are
graded based on their power over the company and interest in company
affairs.
 Keep satisfied – These stakeholders of Covea have a high power
over the company but show little interest which is why company
must keep them satisfied such as employees, sales agents and
actuaries
 Manage closely – These stakeholders of Covea are its bread and
butter for survival in the market and must be catered to expertly
with the best experience possible such as shareholders and
customers.
 Monitor – These stakeholders must be catered to on a very basic
level as they are neither powerful nor hold interest in the
company’s operations. For Covea these are mostly professional
bodies which are informed of basic information’s
 Keep informed – These stakeholders have low power in the
company but are highly interested in its working which is why they
must be kept in the loop and well informed each time such as
regulatory bodies (Cappiello, 2018)
3. Situational analysis (External Environment)
3.1 PESTLE analysis

This strategic framework divides the external business
environment into various layers and has been applied below on
Covea insurance.
 Political – The political instability of the UK following the COVID-
19 pandemic and Brexit have affected Covea in a major way as it
suffered from a slump during initial years of COVID-19 which it still
has not recovered from
 Economical – Due to the constant hits to the UK economy due to
major disruptions, the personal lines motor products have suffered
great losses
 Social – There have been incidents that have dented the image of
the company publicly such as its well documented feud with
SCOR, a mutual insurance company
 Technological – Despite effectively digitizing their insurance
operations, Covea still has a long way to go to take advantage of
rising tech trends in the insurance industry such as trust
architecture, cloud for all core systems.
 Legal – The post Brexit British law is a very place to operate in for
Covea as the amount of compliances and legal regulations are
increasing and it has also gotten into legal hot waters
 Environmental – Insurance companies have an important role
towards protecting the environment and Covea also does the
same by encouraging recycling and putting an emission cap on its
car fleet (HAMZEH and Atatalab, 2019).
3.2 Five forces analysis
This strategic model helps analyse the various forces which drives
the business functions in their particular industry. It has been
applied below in respect of the Insurance industry.
 Power of suppliers – This is moderate as the role of
suppliers in the insurance industry isn’t as widespread or
important as buyers

 Power of customers – This is very high for Covea as the
policy holders are aware of the pricing and can easily switch
upon subjection to poor service
 Threat of new entrants – This threat is moderate as the
inflation and Brexit have made things harder and more
expensive to invest upon initial entry
 Availability of substitute products – This force is weak as
the products provided by Covea are quite diverse and its
premium and commercial lines are quite innovative with little
substitutes
 Existing competition in the industry – The UK insurance
industry has many big players which is why this force is
strong direct line, RSA and prudential
3.3 Customer analysis
This analysis helps understand the core audience of the company
and their needs. It has been applied underneath to analyse the
customers of Covea insurance.
 Customer segmentation – Most of the customers of the company
can be segmented into three broad types, those who are looking to
ensure their vehicles, business companies and owners and
personal insurers who focus on life and health insurances
 Needs of the customers – The needs of these customers are to
have quality insurance which provides their vehicles and
expensive purchases with a safety net, get important business
assets secured and to make sure that their health or the aid of a
loved one is also always prepared and ready to be used
 Associated products – Covea provides a comprehensive motor
insurance product portfolio covering a lot of things but sloppy
customer service is something to look at. Its commercial line which
is its most successful offering helps businesses a lot and personal
insurances in the light of COVID-19 have also been bolstered by
the company

3.4 BCG matrix analysis
The various product liens of Covea insurance have been listed
herein as a graphical representation of the BCG matrix.
 Stars – The commercial product line of Covea is its biggest winner
as it has grown even in the pandemic and has provide the
company with consistent profitable returns
 Dogs – The household insurance line of the company has not
picked up pace and it faces tough competition in this regard from
bigger companies such as Direct line
 Cash cows – The personal lines motor insurance has given
disappointing results in the past but the company still has great
market share in vehicle insurance.
 Question marks – The life and health insurance sector is booming
in the light of the pandemic but Covea just does not possess the
capability to scale and fully exploit this opportunity
4. SWOT analysis
Strengths
 Wide variety of products
covering almost every
domain
Weaknesses
 The insurance operations
have been disrupted by
both Brexit and the
pandemic
Opportunities
 Various avenues for new
technological integrations
and strategic partnerships
Threats
 The growing inflation and
claims due to economic
instability of UK
5. THE KEY STRATEGIC OBJECTIVES