International Strategy for Royal Insurance Corporation of Bhutan Limited

Abstract

Globalization and internationalization have become a fashionable trend for companies around the world and it is now embracing the emerging economy at full pace. The recent airline tragedies have highlighted that the insurance sector, in particular, are very volatile and vulnerable to loss. The study aims to find out the internationalization intent of RICB, one of the oldest composite Insurance Company based in Bhutan and the specific lines of business for expansion. The independent variables or the internal resources owned by the company like the human capital, relationship capital, trust and legitimacy are used to find the influence on the internationalization and the model was modified from (Hitt, Bierman, Uhlenbruck, & Shimizu, 2006). The main motivation for internationalization are due to small and slow home market, maintain the same growth trajectory, effects of globalization, the financial rating of company etc. The methods used for the analyzing the data to obtain the findings are pure qualitative with an inductive and exploratory approach based on interpretivism research philosophy. The study was based on a single case study on the RICB, one of the oldest insurance companies of Bhutan. A total of 11 key officials including the top management of the company were interviewed through face to face interviews conducted in Bhutan. The data were then coded and categorized as per the themes that emerged to get the final findings. The findings on the research were that the company had already initiated the internationalization process for inward reinsurance business from the year 2013, by functioning from Bhutan. The reinsurance business made a gross profit of BTN.4.37 million within a span of few months, attributable mostly to the efficient resources and capabilities owned by the company. The company is also in the process of expanding corporate level product diversification into the foreign market through its proposed investment abroad project, the first ever to be initiated in the country. It was found that human capital, relationship capital and trust have a positive influence on internationalization and the influence of legitimacy was not able to establish, due to the modus operandi of functioning from home market without opening offices in foreign market. The new findings from the research findings of Hitt et al.( 2006) were the positive influence of trust.The company should work on furthering the above resources to gain sustained competitive advantage in the international arena.