Defining Life Insurance and Product Development

Chapters 2 and 3 focus on the organizational strategies of insurance firms. Chapter 2 analyzes the disparity between transnational and domestic life insurance firms’ strategies. Insurance firms from both camps faced a conflict between local preferences and profits when designing their products. However, they handled this conflict very differently. While transnational firms defined life insurance as modern risk management, and offered products for managing unexpected misfortunes; domestic firms defined life insurance as money management, and launched products for savings and investment purposes. The former adopted a profit-oriented model by attempting to change local preferences; whereas the latter took on a market-share approach by accommodating local preferences. Through a chronology of the ebbs and flows of the market’s development, this chapter demonstrates the tension between the local cultural logics and the profit-oriented institutional logic of life insurance. It documents the battle between the transnational and domestic players in the field, explaining how their battle is rooted in their different ways of handling cultural obstacles, and in their divergent institutional logics of operation.