1. Circumstances and Several Main Problems of EIIC at 1991
1.1 Changes in the economic environment and its impacts to EIIC
Engineering Inspection & Insurance Co. (EIIC) is a small and medium-sized insurance Enterprise depended on its distinctive competence, machinery and boiler inspection service. EIIC was a highly successful company before 1990. However the economic environment changed progressively when EIIC reached its flourishing stage. These changes reformed the new development road for insurance industries and consequently generated enormous troubles to EIIC.
At the early 1990s, insurance business already developed into a mature and highly concentrated industry. Its appearance could be proved by dates from the case document that 80 percent of the total annual premiums written by the U.S. boiler and machinery insurance industry were accounted by the top five companies. Obviously, the threats from other competitors became strongly intense to EIIC. The competiveness could motivated the evolution for companies and industries, but EIIC, which had been doing its business in a stable way for a long time, didn’t accept to adopt any new changes.
On the other hand, collaboration became one of trends for insurance industry. For instance, insurance packaging appeared and it brought a lot of opportunities and fundamental influences to insurance industry. Generally, the marketing method “packaging” could customers a perception of convenience and economic benefits. As a result of it, this approach used more and more frequently in insurance sales. However, this evolution only produced negative impacts to EIIC, because it requires each insurance company reduced the speed of making particular insurance policies for a part of package. The performance objective speed is one of the weaknesses of EIIC, whose time of completing is