AIG Insurance Essay Example | Topics and Well Written Essays - 750 words - 11

AIG Insurance - Essay Example According to the paper despite the institutional void, the American Insurance Group was the first to gain a license to operate insurance products. Though the company had to endure seventeen long years in the wait, the breakthrough came when AIG had already owned twelve subsidiaries in China allowing it to apply for an insurance license. The group had access to the Chinese market through its subsidiaries and by getting licenses to sell various insurance products in multiple cities, AUIG was able to break into the institutional void of the Chinese market. The manner in which AIG tailored its products to suit the Chinese market was another way in which the company ensured that its preciously procured licenses were not wasted away. The institutional void in the Chinese market was filled not only by AIG but later on by the Italian insurance giant too. However, AIG had the benefit of being the first in the market. The framework developed by Khanna regarding strategic policies and planning of an insurance company provides set guidelines that can be adopted by firms entering newer markets. The emphasis of companies should be to develop global policies and strategic standards in homogenous markets. However, the Chinese market was not comparable to any previous market that AIG had operated in – the key was to use Khanna’s framework and adopt the insurance products in order to suit the Chinese market. This study outlines that AIG transformed its products to suit the Chinese markets by introducing new marketing techniques and promoting its insurance products in a way that appealed to the Chinese population. It is obvious that there was no lying on part of AIG, however, the emphasis of the marketing program was to project the life insurance policies as savings schemes so that the Chinese market would pay attention to the products. The FSA’s developed by AIG in the markets provided it the advantage that it needed in the Chinese market.