Businessmodel of Pacific Life

Customer Segments

Pacific Life has a segmented market business model, with customer groups that have slightly different needs. The company targets its offerings at individuals, businesses, and pension plans.

Value Proposition

Pacific Life offers three primary value propositions: accessibility, innovation, and brand/status.

The company creates accessibility by providing a wide variety of options. Its products/services include the following:  life insurance, annuities, mutual funds, investment products/services for businesses, financial protection, wealth accumulation, and wealth preservation.

The company’s structure helps foster innovation. It maintains a mutual holding company structure, meaning that contract and policy owners are members of the company and it is not influenced by stock price when making decisions. This frees up the firm to develop innovative products.

The company has established a strong brand due to its success. It holds the following rankings:

• First indexed provider of universal life insurance
• Seventh largest provider of life insurance sales
• Eleventh largest provider of variable annuities

• Fourteenth largest provider of fixed annuities The company is also the top life retrocessionaire in North America, with $106 billion in individual life reinsurance and a 41% share of the market. It has paid $2.1 billion in insurance and annuity benefits and has $800 billion of life insurance in force. It generated $8.4 billion in operating revenues in 2015. It has strong financial strength ratings as follows:  A.M. Best – A+; Fitch – A+; Moody’s – A1; and Standard & Poor’s – AA. It counts over half of the 100 largest U.S. firms among its clients, and has hundreds of thousands of customers overall. Lastly, it has won many honors, including the following:

• Gold, Silver, and Bronze Stevie Awards from the American Business Association (2015)
• Dalbar Awards for Financial Intermediary Service and Annuity Service (2014 and 2015)
• Top Business by Coast Community Awards (2014)
• Brainshark Sharkie Awards for Marketing Presentation (2014) ### Channels

Pacific Life’s main channels are financial planning firms, securities broker-dealers, wirehouses, banks, and other financial institutions. It has selling agreements with more than 850 such companies nationwide. The company promotes its offering through its website, social media pages, television advertising, and sponsorship of sporting events.

Customer Relationships

Pacific Life’s customer relationship is primarily of a self-service nature. Customers utilize its products and services while having limited interaction with employees. The company’s website features a section called “Education Center” that includes useful resources such as articles, infographics, financial calculators, a video library, and answers to frequently asked questions.

The site also provides a collection of market outlook reports called “Manager Insight”. That said, there is a personal assistance component in the form of phone and e-mail support.

Key Activities

Pacific Life’s business model entails designing, developing, and delivering its products and services to customers.

Key Partners

Pacific Life’s key partners are the financial planning firms, securities broker-dealers, wirehouses, banks, and other financial institutions that sell its products.

Key Resources

Pacific Life’s main resources are the insurance industry experts that design and develop its products and services.

Cost Structure

Pacific Life has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely sales/marketing, a fixed cost. Other major drivers are in the areas of customer support/operations and administration, both fixed costs.

Revenue Streams

Pacific Life has one revenue stream: revenues it generates from sales of its products and services to its customers.