P&C Insurance Industry: AmTrust Financial SWOT
AmTrust Financial strengths include its strong distribution network, loyal clients, strong free cash flow, and strong online presence. The company is threatened by competition and political uncertainties.
- The company has a strong distribution network. The firm has 29 offices in different locations in the U.S. This enables it to be able to avail its products to a large customer base in a timely manner.
- AmTrust Financial has loyal clients. The company has been able to develop a strong relationship with its agents that help to provide additional clients. It currently has 9,500 agents.
- The company has an excellent return on capital expenditure. The execution of new projects for the company has been relatively successful and this has helped build new revenue streams and thus generate returns on capital expenditure.
- The company has a strong free cash flow. This helps the company to expand to other projects.
- The firm has skilled, qualified, and accredited professionals. AmTrust Financial has spent its resources on training and motivating its employees.
- The company has a strong online presence. It has thousands of followers on Facebook, Twitter, and Instagram. It also has an interactive website that draws sales and internet traffic.
- The company is not good in merging businesses with different work cultures. Although it succeeds in combining small businesses, it has its share of failure to combine companies with different working culture.
- AmTrust Financial takes longer to buy and sell goods than the industry average. The company, therefore, adds up costs that are unnecessary. This is because the company is not good at demand forecasting.
- A large proportion of property owned by the company is leased. This increases the costs it incurs due to large amounts of rent.
- Financial planning of the company is not being carried out adequately and effectively. The current low levels of assets when compared to liabilities may create liquidity problems.
- Centralized decision-making is time-consuming. Certain officials need to approve team decisions, this reduces efficiency and innovation in the firm.
- The current organization structure limits expansion to other products. This is because the current structure is only compatible with the current business model.
- The new trends and growth of the e-commerce industry present an opportunity to AmTrust Financial. The company can increase its revenue by investing in e-commerce.
- An increase in the number of internet users and social media users, present the company with an opportunity to interact with its customers and promote its products.
- Technological advancements present an opportunity for the company. It can automate its services and collect data from its customers to improve its marketing efforts.
- There has been an increase in consumer spending. This can result in "growth in AmTrust Financial Services’s target market with new customers that can be attracted towards the business".
- The low inflation and the projected stagnation of inflation can help the company's input costs to remain low.
- The increase in competition in the industry may result to low prices. This will reduce the company's revenue because it will also be forced to reduce prices.
- The numerous new entrants in the market are gaining market share. This is a threat to the company as it might lose some of its customers to the new entrants.
- Political uncertainties "prove to be a barrier in business". This might hinder performance and make the company to lose incur unnecessary costs.
- Increase in substitute products. This might lead to a decrease in consumption of present products.