Auditing refers to the systematic analysis of organization financial systems in the essence of tracking the business records. Big company firms may be audited for reasons such as security and the suspicious threat such as theft. Some companies may try to evade the revenue authorities by not paying the dues required, and thus the tax authority will do their audit annually. Auditing may not judge the future of the business but analyses the current business environment. An audit involves collecting information on the clients and the competitors. The customer service is evaluated and based on the mode of purchase or the services requested. The main aim of auditing is to grow, maintain and achieve the strategic objectives of a business organization. Consider a company planning to migrate to its main competitor's base. The company evaluates its sales and that of its main competitor. The following piece of work will audit the Oman insurance company basing on the customer and main competitor information.
Oman insurance corporation, OIC is one of the biggest leading insurance companies in the Middle East. The organization was formed in the year 1975 and OIC today is one of the largest financial giant institutions with over fifteen branches operating under head office located in Qatar. The Oman Insurance headquarters are in Dubai, UAE. The company is rated A-stable, by standard and Poor's and an A, Excellent by AM best reinsurers. The company's vision is to provide unique insurance solutions which help, protect and create wellbeing and wealth. The Oman Insurance company operates under customer friendly services to attain quality products while underwriting the general types of risk, health and life insurances while surging forward to make unique covers based on a client's perception . The Corporation provides some insurance services which include solutions from personal lines, motor, health and life coverage solutions. The company provides excellent lines covers from medium to large commercial and industrial enterprises. For energy, construction and marine sectors. The organization has the right board of directors who are qualified and consultants in various fields.H.E.Abdulaziz Abdulla Al-Ghulair is the current sitting chairman while Mr. Abdul is the vice president. The two executive directors work with other five board members.
The chief executive officer of the company is Christos Adamantiadis. Oman Company has received many awards following its pursuit of quality services which are customer oriented which include the most innovative insurer, commercial lines insurer of the year, UAE insurer at the MENA awards 2015 and the best business insurance of the year at the UAE banker products awards 2015.OIC is a customer oriented company with a clear vision and focuses on service Even due to a slower growth rate of the market, Oman insurance company expectation is to continuous influence premium increment at the rate of 10-11% compound annual interest rates. The insurance corporation substantial investments in data mining and analytics will allow the insurance company to focus on the segments that guarantee highest returns and have the maximum chances to grow the business profitability over the projected three-year business strategy on health insurance coverage. The most significant agenda is to increase profits as compared to the previous years before the establishment of the business strategy
The company notices that the sales have been going down and plans on auditing the sales information and that of the main competitors. The company's financial sales at the close of 2016/2017 financial year. This was the 40th annual report of the company. The gross premiums increased by 11.40% reaching 3.6 AED billion compare on the previous financial year 2015 with AED 3.19 billion. The 2016 realized profits were 100.4million compared to AED 50.6 million realized in 2015. The company also had a pleasure of enjoying the net incurred claims with a decrease to 786AED million compared to the previous year claims of 1060 AED million. The auditors audited the premier company sales for a way out in outsmarting the company in the active competition.
However, the main competitor who happens to be the premier insurance company seemed to be far much better with the following sales.
Premier health insurance is a world based company. The organization is headed by the PA group and tailored to the non-US residents including the American civilians. The end of the 2016 financial year the company closed with a gross profit of 5.0 AED billion compared to the previous year's profit of 11.5 AED. Moreover, the company had incurred small claims of around 400AED. The report depicts a higher profit margin.
Basing the audit on the two companies the Oman insurance had to come up with the business strategies both internally and externally.
To study the external factors, we will employ the SWOT (Jepsen, 2010) and PESTEL techniques (university, 2010). The SWOT will be used to view the strengths, weaknesses, opportunities and the threats of the business strategy plan while the PESTEL will analyze the political, economic, social, technology, environmental and legal framework. The three large factors include:
The technology involves the use of science in the production of goods and provision of services in an organization (Lacob Rucci, 2007). Technology enhances real competition among different business groups in the country. Technology has revolutionized the way Oman insurance company conducts its business. The use of technology has influenced communication processes. Emails, websites, texting and personal digital products applications have helped Oman insurance company to improve communication with clients. Oman insurance company aims at boosting its online services by creating a database which will enable their customers to access their health insurance coverage through the enterprise's website. The site will be designed with a database which will capture customer's monthly premiums. The site will also allow clients to either use their visas cards to make payments and also to make general inquiries about their cover. The database will involve the customer's names, gender, age, location, profession, and nationality. Also, clients will be able to pay their premiums via mobile banking without necessarily traveling to the company's head office. The rise in technology leads to mechanization of operations which leads to retrenchment since machines replace human efforts. Growth in technology requires high initial setup cost which might deprive the Oman insurance company profits realized since the finances are needed to be invested in modern technological facilities which are too expensive. Many customers have aired feedback through these communication channels hence the organization has considered acting on the complaints and feedback to better their services on medical insurance cover business strategy. Information can now reach a broad market space faster and accurate.
Technology also has helped Oman insurance organization increase the productivity of its employees. Business soft wares developed by the insurance company together with computer programs enable the insurance employees' process more information on business matters than the previous manual methods. Oman insurance company has reached a broader market, thanks to the growth and development of technology. Technology has enhanced the use of retail websites which clients can access around the clock when they need to acquire insurance cover. Oman Insurance Corporation has achieved this through these of carefully placed web banners and ads.
Outsourcing is another innovation as a result of the growth and development of technology. Oman insurance company has outsourced some of its operations to other businesses in the same business field countywide. Outsourcing has lowered its operations costs, and the organization has focused on completing the business function they do best.
Economic factors refer to the aggregate of the nature of the financial system of the country the bazaar composition of the economy to the economic policies of the government of the corporation of the capital market, business series, the nature of factor endowments and the socioeconomic infrastructure (Bohlin, 2004). For a business organization or entity to be high, the economic factors surrounding its operations must be considered. The forces of demand and supply, inflations; deflations also affect Oman insurance company health cover. The fluctuation foreign exchange rates might see a depreciation or appreciation in the purchasing power of a currency and the clients may opt to exit. A decrease in the rate of foreign exchange will result in low economic growth rate. Hence the clients will not be able to subscribe to the health insurance coverage offered by Oman Insurance Company. On the other hand, an increase in the rate of foreign exchange will mean a positive change in the economy leading to the high bargaining power of clients.
When customers are economically enabled, they will tend to subscribe to t6he health cover as opposed to when the clients are financially disabled. Concerning the economic fluctuation, the Oman insurance company should invest in forecast plans whereby in the case of inflations, deflations, and shifts in demand and changes in supply the reasonable profits made by the corporation will not be negatively affected. Oman insurance company should formulate a sound market capture strategy which will enable the company to compete efficiently and even outdo its competitors in the insurance business market. In the case of economic growth, the Oman insurance company should equip its operations in such a way that more clients can subscribe to the health insurance coverage. The company should consider involving the all economic classes that are the lower class, middle class and the upper class in the society. The cover will include calculating premiums to be paid by the client's available disposable income. Catering across the economic classes will not only provide a sound base for the growth of the insurance company, but also it will ensure that the business strategy being developed reaches the largest market in the region of operations thereby making it possible to realize profit increase of 10-11% annually in accordance with the three years business strategy.
In the case of technological factors, the Oman insurance company should consider investing in the modern technology. The choice of technology should be based on the reliability if the technology, efficiency, effectiveness, and accuracy of the technology, setup cost, and maintenance cost. The use of internet in carrying out the company's operations will result in involvement in less labor force whereby the company will save more money that would have been utilized in the payment of wages and salaries. Also due to changes in the world trends, technology upgrade will enable the Oman insurance company reaches more clients and hence be able to cover broader market for its products or services offered. Technology will also enhance efficiency and effectiveness in the implementation of the strategic business plan which is to develop a modern health insurance cover for the people of the United Arad Emirates.
The government establishes rules which govern sales in any nation . When government rules change, the company will tend to modify the way they operate. Mostly, government market regulations and policies in the economy influence the competitiveness and profitability of business organizations in a given country. Business owners must adhere to regulations and rules established by local governments, the national governments and the federal states which it operates .the government might affect the business strategy laid through the following.
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