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1 – 10 of 410Nicola Persico and C. James Prieur
In 2007 Conseco's CEO, C. James Prieur, faced a complicated set of problems with his company's long-term care (LTC) insurance subsidiary, Conseco Senior Health Insurance (CSHI)…
Abstract
In 2007 Conseco's CEO, C. James Prieur, faced a complicated set of problems with his company's long-term care (LTC) insurance subsidiary, Conseco Senior Health Insurance (CSHI). CSHI faced the threat of congressional hearings and an investigation by the U.S. Government Accountability Office, triggered by an unflattering New York Times article alleging that CSHI had an unusually large number of customer complaints and was denying legitimate claims. This threat came in addition to broader systemic problems, including the fact that the entire LTC industry was barely profitable. What little profitability existed was dependent on the goodwill of state insurance regulators, to whom the industry was highly beholden for approvals of rate increases to keep it afloat. Furthermore, CSHI had unique strategic challenges that could not be ignored: First, the expense of administering CSHI's uniquely heterogeneous set of policies put it at a disadvantage relative to the rest of the industry and made rate increases especially necessary. Second, state regulators were negatively predisposed toward Conseco because of its notorious reputation and thus were often unwilling to grant rate increases. Finally, CSHI was dependent on capital infusions totaling more than $1 billion from its parent company, Conseco, for which Conseco had received no dividends in return. Faced with pressure from Conseco shareholders and the looming congressional investigations, what should Prieur do? Students will discuss the available options in the context of a long-term relationship between Conseco and state insurance regulators. Prieur's solution to this problem proved to be innovative for the industry and to have far-reaching consequences for CSHI's corporate structure.
After reading and analyzing this case, students will be able to: evaluate the impact of a regulatory environment on business strategy; and assess the pros and cons of various market strategies as well as recommend important non-market strategies for a firm in crisis in a highly regulated industry.
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Sulagna Mukherjee, M. Durga Prasad and Sudeep S. Kumar
Financial Accounting and Corporate Finance.
Abstract
Subject area
Financial Accounting and Corporate Finance.
Study level/applicability
Undergraduate, Post Graduate and Executive Education.
Case overview
T.A. Pai Management Institute (TAPMI), a leading B School in South India had established its new campus in Badagabettu village, about 5 km away from Manipal, Udupi District, Karnataka. Though the campus housed about a thousand inmates, comprising students, staff and faculty members, a proper public transport system did not develop commensurate with other facilities. The TAPMI administration was flooded with requests from various stakeholders to find a solution to this vexed problem. The Dean Administration had three options before him namely convincing the existing private bus operator to run a new bus en route TAPMI, TAPMI purchases the bus by either paying cash or availing loan from a bank or TAPMI can take a bus on lease. The predicament before Dean was to find out the most economically viable solution.
Expected learning outcomes
At the end of this case discussion, the participants will be able to: understand the application of breakeven analysis; prepare income statement, balance sheet, cash flow statement and forecast of cash flows; evaluate financing and investing decisions by using various techniques; discuss and debate the different alternatives available to the organization.
Supplementary materials
Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.
Subject code
CSS 1: Accounting and Finance.
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Biju Varkkey and Bhumi Trivedi
Aster Retail (AR) is the retail pharmacy division of the Aster Dr Moopen's Healthcare (ADMH) Group. The group delivers healthcare services across the Middle East, India and the…
Abstract
Aster Retail (AR) is the retail pharmacy division of the Aster Dr Moopen's Healthcare (ADMH) Group. The group delivers healthcare services across the Middle East, India and the Far East, with a portfolio of hospitals, clinics, diagnostic centres and retail pharmacies. AR, under the leadership of Chief Executive Officer (CEO) Jobilal Vavachan, is well known for its people-centric approach, unique culture and innovative human resource (HR) practices. AR has won multiple awards for HR practices, service quality and business performance. In a recent corporate restructuring (2018), “Aster Primary Care” was carved out by combining the group's Clinics and Retail businesses. This case discusses the evolution of AR's HR journey and the challenges associated with integrating culturally diverse businesses without compromising the values of ADMH and its promise, “We'll Treat You Well.”
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International business/International marketing.
Abstract
Subject area
International business/International marketing.
Study level/applicability
Courses: the case is directly related to courses on “International Business” and “International Marketing” in the Master of Business Administration programme.
Training programmes: management development programmes for working executives, on the topics “Business across borders”, “Business stabilization in foreign markets”.
Case overview
In 1999, the liberalization of the insurance sector as per the recommendations of the Malhotra committee gave way for privatization and foreign firms entered this sector through joint ventures. The business growth, which was enjoyed by these firms from 1999 to 2008, was tremendous. The growth percentage started declining following the global economic downturn in the capital markets. This situation compelled the insurance firms to re-look into their business strategy. On one hand whatever growth they had, 80 percent of it was through unit linked insurance plans depending on the capital market. On the other, it was identified that in a country like India the untapped market potential was among the rural millions. Reaching those people who are at the bottom of the pyramid necessitated a completely new business model to be developed as the need of the hour. The take stock of the position at this vnjuncture is the crux of the present case study, which envisages finding out alternative delivery models to suit the Indian rural market taking into account the intrinsic nature of life insurance and the basic living styles and mentality of the rural folk.
Expected learning outcomes
After discussion and analysis of this case, students will be able to:
understand how market culture in a target country differs from that in the home country;
appreciate how challenges in a developing country market have their own unique features to be understood;
identify various courses of action and evaluate them on the basis of the host country factors;
understand the “international planning process”; and
appreciate how important it is for a country manager of a multinational firm to plan and execute the marketing mix suited to the inherent qualities of the target market.
understand how market culture in a target country differs from that in the home country;
appreciate how challenges in a developing country market have their own unique features to be understood;
identify various courses of action and evaluate them on the basis of the host country factors;
understand the “international planning process”; and
appreciate how important it is for a country manager of a multinational firm to plan and execute the marketing mix suited to the inherent qualities of the target market.
Supplementary materials
Teaching notes.
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Nicolas Dupont, the owner of Chateau de Montana, a struggling (and old) boutique hotel in Crans-Montana Ski Resort, Switzerland, wished to renovate and reposition his family-owned…
Abstract
Nicolas Dupont, the owner of Chateau de Montana, a struggling (and old) boutique hotel in Crans-Montana Ski Resort, Switzerland, wished to renovate and reposition his family-owned hotel to target higher room rates. Dupont commissioned Olga Mitireva and Yulia Belopilskaya as consultants to assess the proposition. The consultants had to extract cues for the room rate of the repositioned hotel from comparable hotels. However, the room rates varied significantly across similar hotels due to their differing characteristics and locations. It was a cognitive challenge to read the patterns from a few comparable hotels. They collected the data of 200 hotels from similar locations and simulated room prices using hedonic regression models.
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Maya Vimal Pandey, Arunaditya Sahay and Abhijit Kumar Chattoraj
The objective of writing this case study is to allow management students to engage with the complexities of mergers and acquisitions (M&As) in the insurance sector in an emerging…
Abstract
Learning outcomes
The objective of writing this case study is to allow management students to engage with the complexities of mergers and acquisitions (M&As) in the insurance sector in an emerging economy like India. Upon completion of this case study, the students will be able to critically evaluate the business environment of the insurance sector of a developing economy like India, analyse the impact of M&As on the insurance industry of India, appraise the post-merger consequences and strategies to deal with these consequences, assess the applicability of market power and growth theories in the context of M&As and develop a strategic action plan for handling post-merger challenges.
Case overview/synopsis
On 3 September 2021, the Insurance Regulatory and Development Authority of India (IRDAI) approved the “Scheme” related to the merger of the non-life insurance division of Bharti AXA General Insurance Company Limited (“Bharti AXA”) with ICICI Lombard General Insurance Company Limited (“ICICI Lombard”). Earlier, on 21 August 2020, the boards of the companies had approved entering into definitive agreements through a scheme of arrangement. The merger received approvals from different regulatory bodies as mandated (Gandhi et al., 2023). Bhargav Dasgupta, managing director and Chief Executive Officer of ICICI Lombard, stated, “This is a landmark step in the journey of ICICI Lombard, and we are confident that this transaction would be value accretive for our shareholders” (FE Bureau, 2020). However, the merger posed a dilemma for Dasgupta and the management regarding crop insurance owing to its impact on profitability. Crop insurance historically had high claim ratios nearing 135% for ICICI Lombard for financial year 2018. The company ceased to underwrite this product from 2019 onwards (TNN, 2019). However, ICICI Lombard had to fulfil the three-year commitment made by Bharti AXA to the state governments of Maharashtra and Karnataka towards crop insurance. It was a scheme initiated by the Government of India, covering farmers against losses due to cyclonic rains, rainfall deficits and other unforeseen calamities. Dasgupta faced a challenge in managing the interests of the farmers and the company’s shareholders while balancing profitability, which had already been impacted by the COVID-19 pandemic. This case study delves into post-merger complexities in the financial sector non-life insurance industry in emerging countries like India.
Complexity academic level
This case study is suitable for undergraduate and post-graduate management students and executives from the insurance industry.
Supplementary materials
Teaching notes are available for educators only.
Subject code
CSS 11: Strategy.
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Students need to know basic capital budgeting techniques to value INFINITI and its competitors. Issues include how to: handle taxes in a discounted cash flow analysis when valuing…
Abstract
Theoretical basis
Students need to know basic capital budgeting techniques to value INFINITI and its competitors. Issues include how to: handle taxes in a discounted cash flow analysis when valuing an S Corp. where incentives depend on current (known) and future (unknown) tax provisions; value a firm using comparable multiples analysis and transactions data; assess the costs and benefits of acquiring a firm versus being acquired; and analyze an industry and perform a ratio and financial statement analysis.
Research methodology
The case information was obtained through interviews with co-founder Mark Schwaiger. In addition, the authors researched industry and comparable company data, along with current events relating to the professional employer organization (PEO). Financial data was obtained from the owners and competitor data was obtained from Thomson One and Bloomberg.
Case overview/synopsis
INFINITI HR was a PEO providing comprehensive human resources to their clients. Co-founders Scott Smrkovski and Mark Schwaiger were at a crossroads at the end of 2015 trying to determine the best course of action to take with their company to grow and prosper. One option was for INFINITI to be acquired by a larger company and the second option was for INFINITI acquire a smaller company. In this case, students have the opportunity to do a financial analysis and evaluation of INFINITI and its competitors to determine which option is the best.
Complexity academic level
This case is intended for an advanced undergraduate or an MBA corporate finance class.
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Key State Blue Cross and Blue Shield Plan (a disguised case of an actual BCBS Plan) is the merged product of three state plans. Initially burdened with a reputation of poor…
Abstract
Key State Blue Cross and Blue Shield Plan (a disguised case of an actual BCBS Plan) is the merged product of three state plans. Initially burdened with a reputation of poor customer service, Key State's executives decided to invest heavily in service improvement, eventually achieving superior levels. Key State's high-quality customer service emerged as a true competitive advantage for its customers, who were primarily businesses and health benefits consultants who influenced corporate purchasers of health insurance. The Key State brand came to be synonymous with personal service, security, choice, and dependability. But the health care insurance market was changing under Key State's feet. Spiraling costs meant that high-quality service became less of a competitive advantage as employers were lured by low-cost, low-service providers. Many employers cut or dropped health care benefits entirely, swelling the ranks of the under- and uninsured, who in turn were extremely price-sensitive when shopping for health insurance on their own. Finally, the health care insurance market was being revolutionized by financial institutions willing to hold health benefit accounts and pay providers directly, thereby eliminating the need for Key State as a mediator. Key State executives were aware of these changes but were challenged by the mindset, culture, and organizational design custom-fit to their business accounts. The case asks the reader to consider whether Key State has the right number of target markets, whether it should have one brand or several for its different target markets, what it should do for the uninsured, and how it should improve its brand experience in light of the industry's changing landscape. All of these decisions will have significant implications for the organizational design of Key State.
To better understand the challenges involved in a successful health insurance company to cope with a rapidly changing and unpredictable environment; to formulate a new strategy and a new organizational design to accomplish this adaptation.
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Cynthia Ingols and Devon Eckert
The purpose of this case study is to illustrate how Dianne Savastano, founder and CEO of Healthassist, Inc., a US-based health-care advocacy firm, successfully led her clients and…
Abstract
Case study abstract
The purpose of this case study is to illustrate how Dianne Savastano, founder and CEO of Healthassist, Inc., a US-based health-care advocacy firm, successfully led her clients and team through the COVID-19 pandemic of 2020. To gather the data for this case study, the authors interviewed the protagonists, the members of her team and two clients. The authors read Healthassist Newsletters and the firm’s documents; and in fact, they included one Newsletter and several documents in the Exhibits of the case study. The authors conducted a literature review for articles in newspapers and journals about the newly developing field of “health-care advocacy,” a field which Savastano helped to create.
Findings of the case study
The authors illustrate how Savastano, using the five practices of exemplary leadership by Kouzes and Posner, in The Leadership Challenge, led her team through the pandemic of 2020. This is a story of a woman leader, using traits such as warmth, empathy, analysis and decisiveness, keeps her small business afloat when so many other firms collapsed in 2020.
Research
The authors conducted seven interviews and literature searches on the topics of health-care advocacy; women leaders; leading through a crisis; and COVID-19.
Practical implications
The case study illustrates how a woman founder and CEO can lead her firm through a crisis.
Value of the case study
This is an example of how a woman leader managed through the 2020 pandemic.
Subject code
CSS 3: Entrepreneurship
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In March 2007 C. James Prieur, CEO of insurance provider Conseco, was faced with a crisis. The front page of the New York Times featured a story on the grieving family of an…
Abstract
In March 2007 C. James Prieur, CEO of insurance provider Conseco, was faced with a crisis. The front page of the New York Times featured a story on the grieving family of an elderly woman who had faithfully paid for her Conseco long-term care (LTC) policy, only to find that it would not pay her claims. Her family had to pay for her care (until her recent death), which unfortunately resulted in the loss of the family business. The family was now very publicly pursuing litigation. For a company that depended on thousands of employees, investors, and independent agents who sold the insurance plans, this reputational risk was a serious threat. On top of this immediate crisis, all signs in the industry were pointing to the fact that the LTC business itself was not viable, yet over the years Conseco had acquired a number of LTC insurance providers. Students are asked to analyze not only what Prieur’s priorities should be in addressing the immediate crisis but also the risks inherent in the LTC industry and how this might affect Conseco’s success as a business moving forward
After reading and analyzing the case, students will be able to:
Analyze the risks in the long-term care insurance industry
Distinguish the various types of risk that caused a company’s crisis and recognize the potential for contagion
Brainstorm how the risks faced by Conseco could have been avoided or better contained
Recommend the first steps C. James Prieur and the Conseco leadership team should take to rectify the New York Times article crisis
Analyze the risks in the long-term care insurance industry
Distinguish the various types of risk that caused a company’s crisis and recognize the potential for contagion
Brainstorm how the risks faced by Conseco could have been avoided or better contained
Recommend the first steps C. James Prieur and the Conseco leadership team should take to rectify the New York Times article crisis
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