Economic Factors Affecting Insurance Industry
Economic factors affecting insurance industry can either enhance or hinder the thriving of insurance firms. The insurance industry is a major player in the economy and this implies economic imbalances can as well be felt in the sector. In fact, the insurance industry relies on the economy for its survival. Thus, if the economy is not doing well, the insurance sector will also be crippled.
The Main Economic Factors Affecting Insurance Industry
The health of an economy is defined by various elements, which may encourage or hurt growth. This article will outline some of the key economic factors affecting insurance industry. Besides, it will also discuss how those factors can impact the operations of players in the insurance industry.
Inflation is a situation whereby the overall prices of goods and services become too high for many people, causing a decrease in the value of a country’s currency. Besides, it is also a state of uncertainty about the health of the economy characterized by unemployment. As a result of this, many people shy away from obtaining services like insurance. At this point, even government interventions may not have significant impacts since even insurance companies depend on investments from their customers in order to do business. Although, the government can still make efforts towards preventing further inflation.
Inflation is caused by a series of factors and activities like foreign exchange rate, unlimited supply of money by the government, which may not be in the direct control of insurance companies. However, it may have far-reaching consequences on the sustainability of the insurance sector.
The levels of inflation may have varied impacts on the insurance industry. For instance, if the inflation rate is so high, many people may feel threatened to lose their property and may rush to acquire insurance. This will mean more business and revenues to the insurance sector. The general impact of inflation on insurance depends on its relationship with other economic and financial factors.
Generally, deflation is a situation whereby there is a decrease in prices of goods and services. It is caused by the lack of demand across the various sectors of the economy, forcing suppliers to lower their rates or prices in order to attract customers. A fall in the aggregate money supply in the economy is one of the main causes of deflation.
Deflation means the economy is doing well and the value of the currency is competitive in the market. As a result of this, many people are able to spend more, which is good news to insurance companies. When many people start obtaining insurance, the companies will get money to pay claims, attracting more business and revenue.
However, it should be noted that if deflation is allowed to persist in an economy, it may be difficult to change the trend of continuous decrease in prices of commodities, which can impact reduced profits and increased unemployment rates. Central banks should be able to see the signs of growing deflation and tame it before it poisons the various sectors of the economy.
Economic policies can be formulated and implemented depending on the economic situation in order to regulate the activities of financial institutions like insurance companies. In times when an economy is facing a crisis, the government can implement economic policies to shield consumers from exploitation by insurers while also protecting insurance companies. An example is the Gramm-Leach-Bliley Act of 1999.
The economy of a country can also affect the level of competition by increasing or decreasing it. For instance, in developing economies, there is a high level of competition since many people are attracted to the lucrative insurance business. In such cases, insurance companies may be forced to consolidate their efforts through mergers and acquisitions in order to survive in the market. This may sometimes decrease the profits margins for many players in the industry.
Going by the key economic factors affecting insurance industry discussed above, manipulating the economy to suit the interests of insurance companies is a nut too hard to crack. However, insurance companies and the government have a role to play in the formulation and harmonization of policies that encourage economic growth.
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Political Factors Affecting Airline Industry
Political factors affecting airline industry refer to a variety of government interventions that may hinder or enhance the operations of air transport. Considering the vast regions that many airlines operate, the business environment is often regulated by on the political atmosphere in a particular market. The factors may be necessary for the protection of the interests of passengers and safety measures of airline operations. For an airline company to survive, the political environment must be conducive for its operations.
The Key Political Factors Affecting Airline Industry
It should be noted that the political factors affecting airline industry vary depending on the market, among other elements. Besides, not all factors may have a direct impact on the industry. However, the following are some of the main factors that can have significant impacts on the operations of the airline sector.
The airline industry has played a critical role in the growth of the global economy. However, there are still various places across the world where airline transport has not been extensively exploited mainly because of government restrictions. For instance, it is not easy for the airline industry to expand into foreign markets, which are not trade partners with their respective countries. If the USA does not trade with maybe a country like Russia, it will be difficult for American airline companies to expand into the market even if it looks so lucrative.
International trade may also involve agreements between countries regarding airline transport. In such a situation, airline companies have to meet those provisions in order to conduct business. Some of these agreements may end up hindering air operations in some countries, impacting the entire sector.
The tax rates vary from one economy or market to another. This means there are some countries where airline companies have to pay more taxes in order to operate. As a result of this, their operational costs are stretched, hence, decreasing revenue base. On the other hand, the tax policies may also be favorable to the airline industry, encouraging business and profitability.
War, Terrorism, disease outbreaks
War, terror and outbreak of diseases like Ebola are also some of the main factors that can significantly affect airline transport. In countries ravaged by war, it becomes difficult for airline companies to operate due to the risks imposed. Besides, terrorism is also another new threat to the airline industry. In fact, there are nations where some major airline companies have discontinued their operations due to the risk of terrorism.
In countries where such events are experienced, it is always in the interest of passengers and airline companies to suspend or stop air transport. However, there are also cases where politicians have made situations look worse than the actual conditions on the ground. Such utterances may also hurt the airline industry by curtailing business when the environment is not quite bad.
Due to the growth of the airline industry, competition has also gone a notch higher, with many players coming into the game. Competition in the industry can be regulated by the activities of politicians in the sense that, they are responsible for formulating laws. For instance, the Deregulation Act of 1978 lifted all the limitations in airfares, airline routes among others. As a result of this political move, many commercial airline companies began coming into the industry, pushing the competition level even higher. More low-cost carriers were introduced in the market, plunging airfares lower than expected.
In fact, low airfares is one of the greatest nightmares facing many companies in the airline industry now since it goes against the increasing operational costs.
Among the various political factors affecting airline industry above, there are those that can be handled by the airline companies and those they cannot. The expansion of international trade has ensured a favorable market for many airline companies across the world. However, there is still need for more negotiations to put in place the best measures that can ensure safety of passengers, sustainable operations of airline companies. Besides, many airline companies have still not complied with the international aviation regulations, which are crucial for safe and sustainable air transport.
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Buddhist Views on Marriage
The institution of marriage according to Buddhist teachings is considered an individual and personal issue. It is not seen as a sacrament or a religious duty ordained in heaven. It is rather a social convention tailor made to promote individual happiness and general well being of two people. Based on Buddhist views on marriage, marriage is aimed at distinguishing human beings from animal life.
Buddhists accept other religions even in the same household with no religious laws that need both individuals in a marriage to be of a religious convention or Buddhist religion. Despite the fact that Buddha did not express any specific regulations and rules governing marriage, important advice that would lead to a happy marriage was offered. Such advice suggested that loyalty and fidelity are the most essential attributes to a happy and fulfilling marriage.
Other attributes to a happy marriage based on Buddhists views on marriage
Apart from loyalty and fidelity, Buddhists also believe that
- Supporting the parents of a spouse enhance good relations
- Loving one’s children and spouse
- Being generous
- Having a sense of responsibility and of duty
- Acting blamelessly towards each other and helping relatives enhance marital relationships
Humility, contentment, reverence, gratitude and listening to Dharma teachings are important features that all Buddhist believers are urged to stick to for a fulfilling marriage institution. However, they are enhanced by the Five Precepts of the religion because they are a focal point of Buddhism and offer a basis or rather a framework for a successful union.
Buddhist views on marriage and The Five Precepts
Refrain from harming or destroying living things
The actions of a partner should not cause emotional suffering to all living things. All actions in regards to a partner or a spouse should be based on Buddhist teachings of respect and love.
Refrain from taking anything that is not given
in regards to marriage, this precept emphasizes on the need to maintain a respectful and equal relationship and to share responsibilities and duties of a married life as well as family.
Abstain from sexual misconduct
All parties should be faithful in marriage. No one should engage in any adulterous activity or relationship. Additionally, there should be respectful attention to the sexual desires and needs of one’s partner as it is a very important and crucial part of refraining from sexual misconduct.
Refrain from false talk or false speech
Marriage institution should be based on faithfulness and truthfulness. It is a significant aspect and component of this precept as a way of creating and maintaining an open communication channel between spouses.
Refrain from intoxicating drinks and drugs that could cloud the mind
Based on this precept; a clear mind is very important in living an individual’s life. Similarly, clear thinking and headedness is an essential aspect in married life.
According to Buddhist teachings and its religious set up regarding significance and necessity of marriage, there are no clear laws on having children.
Buddhist monks and marriage
Buddhist monks that renounce worldly existence are celibate and do not marry. Monks are not allowed to attend ceremonies therefore; they do not carry out any wedding services. However, they can bless married couples.
According to Buddhists, there is no official marriage ceremony. Regional practices and ceremony often offer a wide range of ceremonial elements and wedding customs . It is usually common to include Homage to Buddha, Homage to the Exalted One, The Fully Enlightenment or The Liberated One. It also includes The Three Refugees, I seek refuge in the enlightened one, Buddha, I seek refuge in the Way to Enlightenment, Dharma, I seek refuge in the Enlightened Community, Sangha and finally, the recitation of the five Precepts as stated above.
From Sigalovada Sutta, the responsibilities and roles for couples are presented and offer a good structure for married life
In 5 ways shall a wife be ministered to by a husband?
- by being gallant to her
- by not scorning her
- by being faithful to her
- by trusting her
- by providing her with adornments
The wife on the other hand thus will be ministered to by her husband will show compassion in five ways by
- she performs her duties well
- she is hospitable to relations and attendants
- she is faithful
- she protects what he brings
- She is skilled and industrious in discharging her duties.”
According to Buddha, “If a man can find a suitable and understanding wife and a woman can find a suitable and understanding husband, both are fortunate indeed.”
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Cultural Factors Affecting International Business
There are numerous cultural factors affecting international business. Culture can be defined as a way of the life of a group of individuals. This encompasses the beliefs, behaviors, knowledge, skills, motives, values and attitudes. The meanings of cultural symbols are usually learned and perpetuated by the society deliberately through the established institutions. Cultural factors are simply factors that come from various components that relate to a cultural environment or culture where a business operates or consumers belong. On the other hand, international business refers to an entity like an international company or a multinational corporation that has business operations in multiple countries. International business also means the exchange of services and goods among businesses and individuals in multiple nations.
What are the major cultural factors affecting international businesses?
- Language and communication
In any business, communication is a vital element that determines how successful it becomes. However, communication of an international business can be affected by language barriers. Communication both orally and use of body language plays a vital role of enabling a business to know what the basic needs of consumers are. An international business that knows how to communicate in different international languages enjoys the benefit of being able to convey the right messages to consumers or prospects. On the other hand, language barrier can be off-putting and a serious challenge in conducting international business even when there is a translator. There are times when language barrier leads to ridicules and anger because physical gestures may vary among countries.
Business people in different countries tackle negotiations differently. Chief executive officers and managers of international businesses should adapt to how negotiations are tackled in different countries. Due to cultural differences and personality in most countries, business persons seem to approach the process of making a deal with the attitude that both parties can win, or one side can win while the other loses. While entering a negotiation session, it is crucial that international businessmen know the negotiation attitude of the other party.
Religious beliefs in different countries vary. International businesses should know the religious beliefs of different countries where they operate and respect them fully. Religion affects the attitude or values of customers on the products or services that are offered by international businesses.
How people show business etiquette in different countries vary. In some countries, business professionals shake hands as a way of showing business etiquette. There are countries where culture requires business people to bow, hug or even kiss on the cheek. This affects international businesses because international business professionals should know how to show respect for other parties. Being aware of the culture’s etiquette of the other party enables international business professionals to avoid making mistakes because some people can be offended by even small gestures.
Culture plays a role in shaping the preferences of tastes and color of different people. It is important that international business appreciates the local taste sense and customs. Taste affects international businesses because they are forced to modify their products so that they can satisfy the specific needs of the target consumers.
Why it is important to know cultural factors affecting international business
Variation in cultural factors should be considered by the management of an international business in order to succeed. This is because culture has a lot of power in the world of business. This power creates insensible ideas and pictures’ matrix whose impacts are exceptional for international businesses. When an international business fails to consider culture, it loses credibility from its target customers. It also gets a negative response from the public. Eventually, it loses revenue. To avoid this, it is important that an international business knows the cultural factors that are likely to affect its operations.
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