A Comprehensive Analysis of Beazley PLC in the Insurance Industry

Introduction

A business organization is governed by a series of factors that helps in driving success of the organization. As per the study conducted by Barbara et al. (2017), organization management refers to the art of combining people to a common platform for making them work towards a common goal of the business organization. The current study therefore works on understanding the organizational structure of Beazley PLC the way it operates for achieving the business objectives. The organization management enables maximum use of the resources through the implementation of careful planning at the workplace. The essay thus works on understanding the company structure of the chosen business organization, the way the management works and the whole organizational structure is governed. In addition to that, the essay works on underpinning the importance of analysing the external business environment and ways it can leverage the existing business conditions for business dissertation help.

TASK 1: Company structure, management and the way it is governed

Company overview and history

Beazley PLC is termed as a specialist insurer with thirty years of experience in regards to high standards of claims service on a global basis. The chosen company is a proud member within the Lloyd’s market and additionally works through the Lloyd’s broker network for accessing a wide range of reinsurance and insurance business all around the global platform. Beazley PLC began in 1986 and brought out by Andrew Beazley and Nicholas Furlonge in 1992 (Beazley.com, 2020). The company has been subjected to steady growth in terms of risks covered and the clients served are well within their geographic reach. Beazley PLC is a mature insurance related business that enjoys a diversified portfolio. The company operates on both national and international grounds making the business portfolio diverse in nature.

Governance within the company

The company operates through a series of main board members, managing the agent board, the board of Irish insurance companies that works on accepting non-life reinsurance related premiums ceded by the different corporate members. The analysis pertaining to the company structure provides a clear understanding that the chosen company is managed by a board of directors, suggesting that the company is based on hierarchical structure. As influenced by Cabanda and Copeland (2018), hierarchical structure forms clear lines of communication establishing lines of relationship between the managers and employees, while providing clear direction to communication. The business comprises 15 members who represent the board and work on ensuring that the right kind of decision is made (Beazley.com, 2020). Currently, Andrew Horton is the Chief Executive Officer of the company, responsible for making the prime managerial decisions within the business. The CEO initially joined the company as Group Financial Director in 2003, as an incharge of financial function. However, after 5 years, Horton was appointed as CEO of Beazley PLC (Beazley.com, 2020).

Management:

The business deals with financial transactions and risk assessment, underpinned by risk adjusted capitalisation at strongest levels. The strong operating performance acts as an evidence of the strong managerial plan that helps in maintaining the perceived profit margins within the business. The relationship between the board of directors and the other entities within the business needs to be considered for ensuring better rates of business, as follows:

Shareholders: As influenced by Rubio-Misas and Fernández-Moreno (2018), the term stakeholder is used for an individual or group that has a stake within the business. Hence, it can be stated, a stakeholder or shareholder can be either internal or external. The shareholders are mainly the company owners providing financial support in return of potential dividends. The relationship between the board of directors and the shareholders (management) cannot be described as just a relationship between manager and employee. The business of Beazley PLC reaches overseas and the board often overlooks the decision taken by the management, giving a formal consent as final decision; however, the relationship extends beyond that. For example, Dickinson (2017), highlighted the fact that the board of directors are responsible for the actions undertaken by the shareholders.

It is for the same reason; the boards of directors need to monitor the decision taken by the shareholders. On the other hand, the shareholders need to take the board of directors into confidence about their decisions. Thus, the relationship can be termed as a symbiotic relationship. As influenced by Eling and Schaper (2017), neither the shareholders nor the board of directors can exist without one another. The aspect of the mentioned relationship remains within the fact that shareholders in the chosen company more often than not are a vital representation of the board of directors. Thus, only when the shareholders and the management exist in a harmonious manner then can promise better profit margins within the business. As supported by Kaffash (2017), for profit margins to increase the company should have independent directors who are not affiliated to the management.. The point in the mentioned context remains in the fact, unless there exists a separation of the directors, there would be limited chances related to conflict of interest.

Employees: The employees need to be open about the prospects of work. As influenced by Jagric, Bojnec and Jagric (2018), board employee relationships are highly paradoxical in nature. Board members of small business organizations with flexible hierarchy interact with the staff in informal ways. Hence, it can be easily stated it is important to ensure that the business organizations should work on interacting with the employees in the right way. In case of the chosen business the employees are not in terms of clear communication with the board. The chain of employee management systems due to the existing hierarchical structure can be termed as one of the leading causes of ensuring miscommunication with the employees. In the mentioned company the employee chain and management is subsequently higher, making it difficult to maintain right terms

The profit margin for the chosen business organization tends to be on the higher side. The increase in the profit margin can be attributed to the hard working employees which are continuously motivated by the board members. In similar regards, the employees are additionally provided with the scope of growth and ensuring that they remain loyal to the organization. As influenced by Copeland and Cabanda (2018), employees tend to look for scope of development; this is where the act of employer branding comes to place. The employees in the mentioned company are provided with the scope of development, promising better profit margins. [REFER TO APPENDIX 1] PLEASE INCLUDE YOUR POINT HERE NOT IN THE APPENDIX

Customers: Beazley PLC is a customer centric business, just like the other business in the insurance sector. The business understands the current customer demands and work as per the same. For instance Biener, Eling and Wirfs (2018), quoted that virtual health care is on the rise and insurance companies are seen to work towards it. Taking advantage of the mentioned market scenario, Beazley PLC introduces investment related to the domain of healthcare. Thus, it can be conclusively stated that the board of directors are extremely concerned about the customers, as they are the one of the driving forces of profit margins

TASK 2: Importance of PESTLE

PESTLE analysis is a framework for describing the possible macro-environmental factors used for scanning the market environment for gaining competitive advantage in business. As influenced by Barbara (2017), strategic management is important for businesses in all streams and it is a system concentrated on monitoring and planning how business organizations are seen to meet their organizational objectives. As stated by Doroshenko et al. (2019), PESTLE is a tool used to understand the external factors that may affect the business of Beazley PLC. There remains no doubt that the chosen model is important for strategic management; however, the analysis needs to be completed first before the managers can truly harness the information they wish to obtain. As opined by Papulova and Gazova (2016), a business organization using the mentioned tool can work on exploring the possibility of social, economic, political and legal forces, creating a positive or negative impact on their business. As per the research conducted by Christodoulou and Cullinane (2019), regarding the importance of strategic analysis it can be conclusively stated that IT businesses are highly influenced by a series of technological factors, while the businesses making use of word of mouth marketing would depend on the existing social trends. Thus, it would be fair enough to state, PESTLE analysis would work on providing overall explanation of influences on business.

FROM HERE TO….

Political factors compose consideration of concern of political stability and chances of corruption. The laws related to international trade in a country can be easily influenced by the political parties that come into power. The level of corruption among the politicians can create an adverse impact on the business as corrupt governmental policies may often force the business organizations to pay extra taxes that may ultimately lead to poor profit margins in the business.

Economic factors are straightforward. As influenced by Christodoulou and Cullinane (2019) economic factors are anything that affects the states of labour costs, inflation rates, trends within the stock markets and so on. In alignment to the possible economic factors, the business can work on ensuring a suitable pricing strategy that in return can promise better rates of return in business. As stated by Shtal et al. (2018), the right pricing strategy can help the company to sell their products at greater rates

A social factor is highly customer centric and primarily focuses on the customer perspective. The consumer behaviour is closely monitored in the mentioned domain. As observed by Doroshenko et al. (2019), buying trends, rates of population, level of education are one of the few social factors that works on ensuring that the business can successfully analyse the external business factors and plan a suitable strategic plan to gain competitive advantage in the market. Considering the businesses need customers, a large amount of focus is put in the mentioned section of the PESTLE analysis.

The technological factors are levels of advancements gained in the field of technology. As stated by Leker and Bauer (2017), every business makes use of technology to sell their services and products. Thus, it becomes important to assess the scope of modern technology and the ways it can be implemented for ensuring better scope of business through clear modes of communication

Legal factors are additionally similar to political to political factors. However, it impacts the ways a business plans to operate costs while handling product demands. For instance, firms demand several patents to make sure the competition does not copy their services. This section is inclusive of the safety and health related laws

Environmental factors such as the change in climate, eco-friendliness of the services and products are termed as a major cause of concern among the businesses. However, Jagric, Bojnec and Jagric (2018), argued the fact, environmental factors under the PESTLE analysis is seen to hold greater importance for businesses operating within the hospitality sector, as bad weather often refers to lack of suitable profi………TO HERE IS NOT RELEVANT TO TASK 2

Strategic management demands the information related to PESTLE analysis to be important. As stated by Kaffash et al. (2019), combination of strategic management along with the information obtained in PESTLE can directly affect business, while continuously optimising the business objectives and performance. Since the mentioned external factors cannot be directly affected, business organizations need strategic management to make sure that the business operations are in alignment to the factors; else the business will be left within the competitive market. The benefit of the chosen strategic tool is having an idea about the potential scope in the chosen industry and working out on a plan that works on reducing threats and risks. Thus, it can be conclusively stated, strategic management helps in ensuring that the manager considers the influences and makes sure that the business is in alignment to the possible factors for success

TASK 3: PESTLE framework to analyse the external environment of the chosen company

THE TEACHER SAID THAT TASK 3A IS MISSING

On the basis of the above table it can be conclusively stated that the business of Bleazy PLC may be subjected to issues due to changing business scenarios. The political scenario can influence the business operations as they often ask for an increasing amount of taxes. Recession may act as a business barrier as the consumers may feel there is no need for insurance, making the business suffer poor financial results. The business in the mentioned scenario is known to witness growth due to proper planning. Taking in consideration of the possible social factors, it can be clearly seen that the aging population needs increasing health coverage for high rates of mortality. Beazley Plc is a multinational company, working in collaboration with a variety of clients. The recent outbreak of the coronavirus. The sales of insurance related policies will be limited within the Chinese market, a place which is known for the largest population. Additionally, the surrounding areas such as Japan, Korea may be adversely affected. The Singapore branch of Beazley PLC may be adversely affected due to the close geographical proximity to the affected areas. Thus, the mentioned company may be subjected to constant shutdown from that branch. However, after things get back to normal, the insurance companies may be subjected to a sudden surge of price. The insurance companies may be approached by healthcare companies and the progressive healthcare policies. The global economy may witness a slow down as there would be no transaction from the side of the Chinese markets. The Chinese market may be subjected to restriction and there remains limited chances of export import. The Chinese market has a large number of consumers; however, due to the advent of Coronavirus the whole global market may suffer a backlash.

Conclusion

The insurance industry is important to the England market in both the developed and developing regions as it can have a ripple effect on both non-financial and financial realms. The analysis given above provides a generic overview about the insurance related industry. The PESTLE analysis in the mentioned context may affect the whole business. The table above mentions key factors that can drive the business environment of the chosen company with suitable examples. However, it is important to note the fact that the list is not exhaustive and there may exist indirect or direct factors, playing an important role in the chosen context. In similar context, the essay does not attempt to determine the most important risk operating within the chosen industry. Indeed the aim of the chosen study was to shed light on the importance of strategic management and not prophesied the possible cataclysmic change.

Continue your exploration of A Comprehensive Management Analysis with our related content.

Reference list

Barbara, C., Cortis, D., Perotti, R., Sammut, C. and Vella, A., 2017. The european insurance industry: A PEST analysis. International Journal of Financial Studies, 5(2), p.14.

Beazley.com. (2020). Specialist Insurance & Underwriting Services - Beazley USA. [online] Available at: https://www.beazley.com/usa.html [Accessed 27 Feb. 2020].

Biener, C., Eling, M. and Wirfs, J.H., 2016. The determinants of efficiency and productivity in the Swiss insurance industry. European Journal of Operational Research, 248(2), pp.703-714.

Breja, S.K., Banwet, D.K. and Iyer, K.C., 2016. Towards sustainable excellence: strategic analysis of Deming Prize winning companies. The TQM Journal, 28(3), pp.390-410.

Cabanda, E. and Copeland, M.K., 2018. Efficiency Analysis of the US Publicly Held Insurance Industry: A Two-Stage Efficiency Model. International Journal of Information Systems in the Service Sector, 10(1), pp.1-15.

Christodoulou, A. and Cullinane, K., 2019. Identifying the Main Opportunities and Challenges from the Implementation of a Port Energy Management System: A SWOT/PESTLE Analysis. Sustainability, 11(21), p.6046.

Copeland, M.K. and Cabanda, E., 2018. Efficiency Analysis of the US Publicly Held Insurance Industry: A Two-Stage Efficiency Model. International Journal of Information Systems in the Service Sector (IJISSS), 10(1), pp.1-15.

Dickinson, G.M., 2017. Insurance markets within Western Europe: an analysis of recent structural changes. The Journal of Risk Management And Insurance, 1, pp.10-35.

Doroshenko, Y.A., Starikova, M.S., Somina, I.V., Malykhina, I.O. and Riapukhina, V.N., 2019. Strategic analysis of competitiveness of high-tech companies as a tool for managing the region's innovative development. Journal of Applied Engineering Science, 17(4), pp.579-584.

Eling, M. and Schaper, P., 2017. Under pressure: how the business environment affects productivity and efficiency of European life insurance companies. European Journal of Operational Research, 258(3), pp.1082-1094.

Godina, O.V., Maksimenko, L.S. and Savtsova, A.V., 2016. Dynamic approach to strategic analysis of the innovative environment of the regional socio-economic system.

Jagric, T., Bojnec, S. and Jagric, V., 2018. A MAP OF THE EUROPEAN INSURANCE SECTOR-ARE THERE ANY BORDERS?. Economic Computation & Economic Cybernetics Studies & Research, 52(2).

Kaffash, S., Azizi, R., Huang, Y. and Zhu, J., 2019. A survey of data envelopment analysis applications in the insurance industry 1993-2018. European Journal of Operational Research.

Leker, J. and Bauer, M., 2017. Strategic Analysis: Understanding the Strategic Environment of the Firm. Business Chemistry: How to Build and Sustain Thriving Businesses in the Chemical Industry, pp.59-107.

Moutinho, N. and Mouta, H., 2018. The Importance of Strategic Analysis in Investment Appraisal. China-USA Business Review, p.494.

Nwachukwu, C. and Chladkova, H., 2019. FIRM RESOURCES, STRATEGIC ANALYSIS CAPABILITY AND STRATEGIC PERFORMANCE: ORGANISATIONAL STRUCTURE AS MODERATOR. International Journal for Quality Research, 13(1).

Papulova, Z. and Gazova, A., 2016. Role of strategic analysis in strategic decision-making. Procedia Economics and Finance, 39, pp.571-579.

Rubio-Misas, M. and Fernández-Moreno, M., 2017. Solvency surveillance and financial crisis: evidence from the Spanish insurance industry. Spanish Journal of Finance and Accounting/Revista Española de Financiación y Contabilidad, 46(3), pp.272-297.

SHTAL, T.V., BURIAK, M.M., AMIRBEKULY, Y., UKUBASSOVA, G.S., KASKIN, T.T. and TOIBOLDINOVA, Z.G., 2018. Methods of analysis of the external environment of business activities. Revista ESPACIOS, 39(12).