How to Prepare SWOT & TOWS Analysis for an Insurance Company

A SWOT or TOWS analysis can be used by an insurance company.

A SWOT analysis analyzes the strengths, weaknesses, opportunities, and threats to a business. It is used to make strategic decisions about a business based on its position in the market. A TOWS analysis is a variant of the SWOT analysis. The difference is that a TOWS analysis lists the attributes in the order of threat, opportunities, weaknesses, and strengths. The difference between the two is that a SWOT analysis emphasizes the strengths and weaknesses of the business first and a TOWS analysis emphasize the future oriented threats and opportunities. Performing either analysis is a simple process that can be performed by following a few simple steps and will greatly benefit an insurance company.

Instructions

1. Write down a list of you insurance companies strengths. Your strengths may include a strong sales team, excellent risk analysts or anything else that gives you a competitive advantage. Include anything that is relevant but avoid listing things that are irrelevant or that do not provide an advantage over other companies.

2. Write down a list of your weaknesses. Weaknesses for an insurance company could include a poor portfolio of insurance policies, small size relative to competitors, or any inabilities that affect your business. You should list anything that has the potential to put you at a disadvantage relative to others in your market.

3. Write down a list of all your opportunities. Opportunities can include potential new insurance clients, new insurance products, or new markets that you can enter. Include all opportunities available to you, not just those which you plan to take.

4. Write down a list of all the threats to your business. Threats can include other businesses and new businesses that may enter the market. They can also include pending government legislation affecting the abilities of insurance companies. Include any threats that you can perceive as being reasonably possible.

5. Re-write these items on a separate piece of paper in the order of threats, opportunities, weaknesses, and strengths. You now have both a SWOT analysis and a TOWS analysis for your insurance company.

Tips & Warnings

• Perform SWOT and TOWS analyses regularly as the environment of the insurance industry changes frequently.

• Use the information from your analyses to make changes that will improve your business performance.

• Be aware that a SWOT or TOWS analysis will not tell you everything about your organization, but that it will provide a rough guide for making improvements.

References

• Anthony C. Danca : SWOT Analysis