An investigation into the effects of competition on the operations of short term insurance companies in Zimbabwe. A case study of Heritage Insurance Company from 2005 to 2009
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The study sought to investigate the impact of competition on the operations of short term insurance companies in Zimbabwe, a case study of Heritage Insurance Company from 2005 to 2009. The short term insurance sector is characterized by intense completion in the market and a dog eat dog situation which has resulted in serious rate undercutting amongst the players in the sector. It is against this background that the author seeks to establish the forces that lead to competition and their effect on company performance through identifying the activities that affect competition. The author will also evaluate the strategies currently being implemented by Heritage Insurance Company to offset competition and remain viable. Literature from various sources pertaining to competition and strategies to offset completion were discussed in this research. Questionnaires, interviews and observations were used as research instruments while bar charts, pie charts and tables were used to present the findings. The study revealed that competition in the insurance industry is mainly influenced by rivalry among the existing firms. It was also found that the availability of diverse brands (insurance companies) influences the degree of competition since buyers will have more alternatives to choose from hence the effect on short term insurance companies, Heritage Insurance Company included The research recommended that Heritage Insurance Company might need to become involved in the community by creating a positive image, for example, offering litterbins in public places in a campaign for cleanliness like what other companies do. It was also suggested that that Heritage Insurance Company should pay attention to competitors and gather information about its competitors.