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The Swan Group, one of the market leaders in the insurance sector in Mauritius, operates through Swan Insurance

Company Limited for short term insurance business and The AngloMauritius Assurance Society Limited for life assurance, pensions, actuarial and investment business. A full range of insurance products and services has been developed over the years to serve the needs of corporate and individual clients. Its executive team and personnel are committed in delivering high standard of customer service and offering excellent products at fair prices. Through our vision and values, our team is driven to help you achieve your goals.

Although Swan Group of industries have market power in the forn of influence over the price they charge, the uncertainty surrounding the outcome of competitive tactics means that it may prefer nonprice competition. The observation that prices tend to be similar between oligopolist and are stable with time might be explained by the kinked demand curve theory. The Group's turnover for 2012 reached Rs. 3,968M, compared to Rs. 3,344M in 2011, an increase of 19%. Operating profit grew by 27% from Rs. 421M in 2011 to Rs. 534M in 2012. The life assurance fund experienced an increase of 18% from Rs. 20,587M in 2011 to Rs. 24,285M in 2012. Total assets in 2012 stood at Rs. 27,874M, compared to Rs. 22,835M in 2011.

DIAGRAM 1

The diagram illustrates a situation where one firm suspects its faces a relative elastic demand curve below the existing price. The temptation would be to cut price in an attempt to increase total revenue. The outcome depends on the rivals response.

From the above it can be inferred that MC becomes MR at point Z which id found in the vertical section of MR curve represented by point TL. Price becomes OP and output is OQ. This is the most profitable price since any price above it implies that demand is elastic and revenue will fall but any price below OP implies that demand is inelastic and thus revenue will fall.

Swan will be better off concentrating on non price competition if it wants to increase revenue. This may include Advertisind and promotion Insuarance innovation-to differentiate its quality of service to customers Market segmentation-i.e niches where only the rich are targeted(car insurance and property insuarance)

Consider a case where Swan Group of industries decide to attempt a collusive pricing without competiton against LIC. This implies that Swan charge the same price but they do not compete against LIC. Assuming that there are only two firms in the market (swan and LIC); equilibium will be reaches where the summation of MC i.e MC of the firm Swan + Mc of LIC = MR

DIAGRAM 2

From the above illustration, it can be inferred that equilibrium is reaches at point Z where output is OQ and price is OP. In fact,Swan and LIC should respect the quota that is Swan will supply Oqa and Lic will supply Oqb in the market.This is known where line ZB is drawn from the equilibrium point to the y-axis. In case if there is a non respect of a quota, this will disturb the market price.

This has been witnessed by many countries which are members of OPEC in term Iran,Iraq,Saudi Arabia and so on which have constantly violated their quota since they supply more petrol because they needed money for several reasons.

(not so sure..check and verify if its exist) The Swan Group operates mainly in the financial services sector and its main activities comprise general insurance, long term insurance, stockbroking, insurance broking, distribution of financial products, investment management, collective investment scheme management, pension administration and asset finance

. The two that are most frequently discussed, however, are the kinkeddemand theory and the cartel theory. The kinkeddemand theory is illustrated in Figure and applies to oligopolistic markets where each firm sells a differentiated product. According to the kinkeddemand theory, each firm will face two market demand curves for its product. At high prices, the firm faces the relatively elastic market demand curve, labeled MD 1 in Figure

Corresponding to MD 1 is the marginal revenue curve labeled MR 1. At low prices, the firm faces the relatively inelastic market demand curve labeled MD 2. Corresponding to MD 2 is the marginal revenue curve labeled MR 2. The two market demand curves intersect at point b. Therefore, the market demand curve that the oligopolist actually faces is the kinkeddemand curve, labeled abc. Similarly, the marginal revenue that the oligopolist actually receives is represented by the marginal revenue curve labeled adef. The oligopolist maximizes profits by equating marginal revenue with marginal cost, which results in an equilibrium output of Q units and an equilibrium price of P. The oligopolist faces a kinkeddemand curve because of competition from other oligopolists in the market. If the oligopolist increases its price above the equilibrium price P, it is assumed that the other oligopolists in the market will not follow with price increases of their own. The oligopolist will then face the more elastic market demand curve MD 1. The oligopolist's market demand curve becomes more elastic at prices above P because at these higher prices consumers are more likely to switch to the lowerpriced products provided by the other oligopolists in the market. Consequently, the demand for the oligopolist's output falls off more quickly at prices above P; in other words, the demand for the oligopolist's output becomes more elastic. If the oligopolist reduces its price below P, it is assumed that its competitors will follow suit and reduce their prices as well. The oligopolist will then face the relatively less elastic (or more inelastic) market demand curve MD 2. The oligopolist's market demand curve becomes less elastic at prices below P because the other oligopolists in the market have also reduced their prices. When oligopolists follow each others pricing decisions, consumer demand for each oligopolist's product will become less elastic (or less sensitive) to changes in price because each oligopolist is matching the price changes of its competitors.