Final 990 Coursework Specimen Guide 07-12-12

8/10/2019 Final 990 Coursework Specimen Guide 07-12-12

1/13

990

SPECIMEN

COURSEWORK ASSIGNMENT AND

ANSWER

990 (Insurance Corporate Management)

The following is a specimen coursework assignment question and answer. Itprovides a guide as to the style and format of coursework questions that will beasked and indicates the depth and breadth of answers sought by examiners. Theanswer given is not intended to be the definitive answer; well reasoned alternative

views will also gain good marks.

Before commencing work on an actual coursework assignment, you need to fullyfamiliarise yourself with the following documents:

Coursework assessment guidelines and instructions

How to approach coursework assignments

Explaining your results notification.

Coursework assignments involve the application of knowledge to work-related

questions. They require you to explore issues in the workplace relevant to the unitfor which you have enrolled. The aim is that you should thereafter be able to applythis learning in the workplace.


2/13

2990 Coursework

CONTENTS

SpecimenAssignment...................................................................................................................3

Specimen answer.........................................................................................................4


3/13

3

990 Coursework

990Insurance corporatemanagement

Coursework assignmentSubmission Rules

Before commencing work you need to fully familiarise yourself with the Candidate courseworkassessment guidelines and instructions, include:

Maximum word limit for assignments (3,200 words)

Font type and size to be used in your assignments

Rules relating to referencing third party work

Penalties for contravention of the rules relating to plagiarism and collaboration

Deadline for submission of coursework assignments

Outline of the marking criteria applied by assessors to submitted assignments

Important notes

Ensure that you have:

Answered all parts of the question in sufficient depth Answered the precise question as worded marks will not be awarded for irrelevant

material

Correctly referenced all sources shown on the reference list in your answer

Checked your word count to ensure it is not too low as this might indicate that you are notanswering in sufficient depth and will affect the marks allocated for components in themark-grid. A word count that is too high may lead to lack of focus

Reread your answer to ensure your description of the context is not too long as marks areonly allocated for answering the question

Reread your answer to ensure it is logically structured and that you have added value bymaking sufficient conclusions and recommendations

Failure to follow the guidance and instructions could result in you failing this unit

Assignment

Briefly describe the context of your organisation or another insurance organisation with which you arefamiliar. Explain the strategic planning process for this organisation.

Undertake a political, economic, social and technological analysis (PEST) for this organisation.

Based on your analysis, identify and justify three major challenges which may be positive and/ornegative for the organisation. Discuss in detail the implications of these challenges for theorganisation and how they might be addressed.


4/13

4

990 Coursework

CourseworkAssignment answer template990

Before commencing work you need to fully familiarise yourself with the 'Candidatecoursework assessment guidelines and instructions', which include:

Maximum word limit for assignments (3,200 words)

Font type and size to be used in your assignments (Arial size 11pt) Rules relating to referencing third party work

Penalties for contravention of the rules relating to plagiarism and collaboration

Deadline for submission of coursework assignments

Outline of the marking criteria applied by assessors to submitted assignments

Important notes:

Ensure that you have:

Answered all parts of the question in sufficient depth

Answered the precise question as worded marks will not be awarded for irrelevantmaterial

Correctly referenced all sources shown on the reference list in your answer

Checked your word count to ensure it is not too low as this might indicate that you arenot answering in sufficient depth and will affect the marks allocated for components inthe mark-grid. A word count that is too high may lead to lack of focus

Reread your answer to ensure your description of the context is not too long as marksare only allocated for answering the question

Reread your answer to ensure it is logically structured and that you have added value bymaking sufficient conclusions and recommendations

Failure to follow the guidance and instructions could result in you failing this unit

Addi tional note:

The following Answer does not disclose the name of the broker. However, unless there arereasons relating to commercial sensitivity preventing you from naming the organisation, youmay do so, bearing in mind that answers are subject to CII confidentiality.

To be completed before submission:

Wordcount:

2,894

Start typing your answer here:

Context

This answer is based on my employer who is a UK regional insurance broker engaged inmarketing, selling and servicing life and non-life products for customers in the small and mediumenterprises (SME) and personal lines markets. The brokerage is majority owned by the directors the two founding directors own over 50% of the equity with the balance owned by some staffthrough incentive awards.

The brokerage was formed in 1985, initially trading from a single office, and has expanded bothorganically and by acquisition to its current size of four offices, each located in a major town, with55 staff in total. The annual premium generated is 14.3m, producing brokerage and fee income

of 2.3m.

Over the next five years, the brokerage has strategic objectives of opening further offices and


5/13

990

5990 Coursework

CourseworkAssignment answer template

making selected acquisitions, with the aim of increasing revenue by 50%.

Strategic Planning Process

Cole G.A. (2003) defines strategic management as . a process directed by top management,to determine the fundamental aims or goals of the organisation and ensure a range of decisions.

The company has a strategic plan which is based on an annual cycle of review and evaluation tostrategically position the business for the next five years. The strategic plan draws on theprevious plan and adjusts it by taking into account changes in the external environment, changesin internal capabilities and progress in delivering the current strategic plan.

The strategic planning process follows a prescribed format which, given the relatively small sizeof the business and the absence of a dedicated strategic team, is led by the Finance Director.After evaluating the various strategic options as provided by the management, with regard to theirrisks and potential financial returns, the Board approves the companys strategic objectives andthen monitors the progress made to achieve these objectives using a balanced scorecardapproach.

Introduction to Polit ical/Legal, Economic, Social and Technological Planning Tool (PEST)

The purpose of strategic planning is to help determine the competitive direction of the company,

for example in terms of new products or the optimum level of growth (Johnson, Scholes andWhittington 2008).

However an essential element is the concurrent analysis of the companys internal and externalenvironments, for example by using a PEST analysis to assess the external (macro)environment, and then complementing this with a SWOT (Strengths, Weaknesses, Opportunitiesand Threats) analysis to help determine which external developments can be best exploited. Anexample PEST analysis, based on a review of the companys current external environment, isprovided below.

As Bensoussan and Fleisher (2008) state The output of any analysis should be actionable, thatis future-oriented and should help decision-makers to develop better competitive strategy and

tactics.

PEST Analysis Rationale

The points under each heading in the analysis have been chosen either because of theirimportance to the business or because there is evidence to suggest that they will becomesignificant during the next few years.

Johnson, Scholes and Whittington (2008) state Key drivers for change are the high impactfactors likely to affect significantly the success or failure of strategy.


6/13

990

6990 Coursework


PEST Analysis

1. Political/Legal2. Economic3. Social4. Technological

1. Political/Legal

(i) Government and regulatory issues

There is Government and regulatory involvement in insurance products, e.g.compulsory insurances (Employers Liability and motor insurance) and there isparticular regulatory involvement given the importance of some products to the lives ofindividuals, e.g. investment related and long term insurances for individuals (pensionsand life assurance). In both instances the aim is to ensure the protection of insureds,consumers and in the case of motor insurance, potential third party claimants. This isreflected in the UK through the existence of organisations such as the FinancialServices Authority (FSA), Motor Insurers Bureau and other bodies. This means thatour operations are subject to regulatory controls and legislation that must beunderstood and adhered to.

(ii) Coalition government

At time of writing (2012), the UK Government is a coalition of two political parties.Coalition governments tend to bring a more centralist approach to policy. One partymajority government in the UK, by contrast has tended to produce polarised,alternating, policies. Such majority governments have resulted in appreciable changesin direction and policy. Nick Clegg the Deputy Prime Minister in an interview (Channel4 2010) stressed the need to move away from the here and now and move towardswhat he describes as ...a further horizon- the horizon shift....

The implications for our organisation of a coalition government, in particular in long

term policy matters, such as pensions provision and the role of the NHS, are thatgreater consistency will be achieved allowing our organisation to set longer termstrategic objectives and resource allocation.

(iii) Influencing Government and Business

Western Democracies have seen the rise in importance of various pressure groups,consumer power, shareholders, think tanks and single issue campaigners all seekingto influence both governments and businesses. For example the environmentalistlobby on big business energy consumption, climate change campaigners, executivepay activists and protesters against genetically modified crops.

The Daily Telegraph (2012) divides these into various categories and it is important our


7/13

990

7990 Coursework


business is aware of the categories in detail. The implication for our organisation is that

we need to respond where appropriate to the issues that are important to pressuregroups and others. This is of particular importance where the issues impact on ourclients, for example pharmaceutical companies and energy companies. There may betimes when we have to review our client base to determine if it is sensible to retaincertain organisations as any financial gain may be out-weighed by potentialreputational loss.

2. Economic

(i) Job growth and unemployment

As at October 2012, the UK unemployment rate is 7.9% (Telegraph 2012). Opinionvaries as to whether this rate will increase or decrease up until the end of 2012. Theoptimists believe that it will further decrease to around 2.5 million people as privatesector employment outweighs the loss of public sector jobs. The pessimists believethat unemployment will increase to around 2.7 million people as the economy is notshowing signs of improvement, firms are hanging on to experienced workers andpublic sector job losses will be greater than private sector growth.

This uncertain economic climate has resulted in downward pressure on wage andsalary levels, and a reduction in overall living standards.

As a consequence of unemployment in general and an uncertain economic climate ourbusiness will experience challenges because of the effects on our customers who mayexperience:

increased claims frequency,

increasing regulation,

particular hardship in some business sectors, e.g. construction,

a greater demand for certain types of insurance,

reduced public provision,

skills shortages.

(ii) Consumer confidence

If people do not feel confident in the future of the economy they are less likely to spendwith major purchase decisions, such as houses and cars, being deferred.

Between December 2011 and January 2012, consumer confidence fell sharply andwas the largest monthly fall since 1994 (Trading Economics 2012).

The effect on our business is that, when individual customers delay investment andpurchasing decisions, less insurance coverage will be required due to lower overallasset values which in turn reduces our commission based income.

(iii) Financial resources


8/13


9/13

990

9990 Coursework


(iii) Corporate Social Responsibil ity (CSR)

This can be defined as:

Whereby business organisations are asked to consider and assume responsibility forthe impact of their activities on their stakeholders, for example customers, suppliers,employees, shareholders, communities and the environment in all aspects of theiroperations. Atkins and Bates (2011).

The Oxford Leadership Academy (2012) has stated that CSR should be fully pursuedeven in these difficult times and their view is that CSR is likely to become mandatory.

The implications for our business are that we should design appropriate products and

services that will meet the needs of a wide stakeholder base, and encouraging our staffto take part in the wider community through initiatives such as involvement incharitable enterprises, the provision of free advice to schools for example and takingan active participation in community enterprises.

4. Technological

(i) Information Technology (IT)

Insurance brokers are dependent on IT to ensure their businesses are efficient. Theyutilise IT in their interaction with clients and insurers. Many systems are fullyautomated and the business of insurance is data heavy and reliant on accurateinformation. As per Insurance Age (2010) brokers have to be serious about the use oftechnology.

Such IT systems, both hardware and software, are expensive to set up, subject toobsolescence and require specialist skills to maintain. These costs can be prohibitiveto small businesses that do not have a large client base over which to spread theircosts.

The implications for our business are that we will need to understand the financialcosts in the short and medium term. Any unplanned costs following a major issue withIT could be catastrophic.

(ii) Business Communications

Although letters, telephone conversations and face to face meetings still play anessential role in the conduct of our business, increasing numbers of clients use socialmedia, e-mail and telephone applications to communicate. Financial serviceorganisations need to be available outside normal office hours.

We need to ensure that we fully embrace these emerging communications trends andtechnological developments to ensure we are not left behind by our competitors.


10/13

990

10990 Coursework


(iii) Availability of information

Information is becoming increasingly available, often at little or no cost to consumers,suggests that the traditional role of an intermediary will change as envisaged in theBritish Insurance Brokers Association manifesto BIBA (2011) which identifies theadded value services which an insurance broker will bring to the relationship over andabove those that the client can access for themselves.

Major Challenges

The overall PEST analysis shows that the external environment is complex and a number offurther PEST items could have been chosen.

The following three major challenges each have significant long-term implications for ourcompany and are not a business as usual approach. They are challenges which will

fundamentally alter the business environment and require our strategic thinking and planning

to respond accordingly.

These major challenges are now discussed:

1. Government influence and provision of services

It is clear that, given the cost of some services, the state will cease to provide them. Thismeans individuals will have to take a greater personal responsibility for service provision.

This has important implications, as the respective roles of Government, private organisationsand individuals, will change across key areas such as education, health and medicalservices and the provision of income in retirement. Private enterprise, charities, socialenterprises and others will provide more and the State less.

This provides our company with both a huge challenge and a huge opportunity. We have towork with the Government and other appropriate bodies to increase savings and protection

provision for individuals and ensure private sector solutions are available.

We should seek to attain competitive advantage by means of early research of experiencesin other relevant countries. The aim is to identify the responses that financial servicesindustries have developed in such countries. We would then, drawing on such overseasexperiences, implement appropriate UK solutions having made relevant modifications to suitthe local circumstances.

2. Corporate Social Responsibil ity (CSR)

There is a danger that CSR is driven by responses to regulatory pressure rather than

operating to meet the needs of all stakeholders, including the expectations of bothshareholders and our customers.


11/13

990

11990 Coursework


The challenge for us is to place business ethics at the core of our company culture and thismay require substantial changes. Ideally such an approach has to be hard wired into thecompany through values, staff selection and training, culture, process and businessrelationships. Although there is an overlap with regulatory requirements concerningcustomers, we need to take a customer focused approach to ensure that we maintain atleast as good a CSR performance as our competitors.

This approach must include improving customer awareness, education and accessibility,whilst ensuring our business dealings and products are transparent. We should exceedregulatory requirements in relation to professional qualifications.

3. Information Technology (IT)

As identified above, IT is an essential part of our operation. The costs of implementation andoperation are high, as would be the implications of an unexpected failure. The challengefacing our business is to balance the need for a system which achieves all we need it toachieve whilst being non-prohibitive in terms of its start up and running costs.

The key, in the strategic planning phase, is to identify exactly what we need our systems todo across their whole life time. This involves careful projections and some assumptions, butalso an intimate understanding of the operation of our business. If we are wrong at the

planning stage, software re-writes and new hardware purchases are subsequently moreexpensive than if they were included in the original specification.

It is also tempting to allow IT systems to run the business, rather than choosing an ITsystem that meets the needs of the business. The key question we need to answer is do weneed a specially designed bespoke system, or can we find a proven IT system thatsubstantially fits all our present and potential needs. If we choose the latter, we mayeliminate a large proportion of the costs associated with development, maintenance andinitial teething problems.

The challenge for our business is to ensure that IT business continuity and disastermanagement plans are in place to minimise losses in the event of catastrophic failure.

Conclusion

In a fast changing and challenging external environment it is of vital importance that the companyutilises all appropriate strategic planning tools, including PEST, and updates the findings of thereviews on a regular basis. This means that the company is likely to be better placed tounderstand the implications of future environments and have in place the means to succeedwithin them. The very future of the company may be at risk should an unexpected or unplannedmajor disruptive event occur which has not been considered and allowed for in the strategic

scenario planning context.


12/13

990

12990 Coursework


In conclusion, the following were identified as significant challenges:

Government influence and provision of services

CSR

IT

A holistic approach must be taken to address these and other challenges. The degree of freedomwe have to respond to each challenge is variable. For example, our response to Governmentinfluence may be constrained by legislation and regulation, whereas the range of optionsavailable to us in responding to the challenge of IT will be much more under our operationalcontrol.

The best approach, therefore is to be aware of, and ready for, any number of possible futures.

So in this instance a PEST analysis should be undertaken in full within an agreed time period andupdated as applicable with the results used to inform and influence strategic objectives andoperational plans.

Reference list

Books

Atkins, D. and Bates, I. (2011) Advanced Diploma in Insurance: 990 Insurance corporate

management, The Chartered Insurance Institute, London, UK.

Bensoussan,Babette E. and Fleisher, Craig S. ( 2008) Analysis Without Paralysis, FT Press, NewJersey, USA

Cole,G.A.(2003) Strategic Management, Thomson Learning, London,UK

Johnson, G. Scholes, K. and Whittington, R. (2008) Exploring Corporate Strategy, Prentice Halland Financial Times, Harlow, UK.

Internet Sites

Oxford Leadershiphttp://www.oxfordleadership.com/news-and-events/articles/csr_article/ [accessed 20 October2012]Pensioncalculatorhttp://www.pensioncalculator.org/21800/news/over-50s-spending-power-decreases-need-for-advice-rises/ [accessed 20 October 2012]

Insurance Agehttp://www.insuranceage.co.uk/professional-broking/analysis/1197267/technology-the-rise-broker-platform [accessed 20 October 2012]

Channel 4http://www.channel4.com/news/articles/politics/domestic_politics/coalition%2Bpolicies%2Bto%2B


13/13

990

13990 Coursework


focus%2Bon%2Baposlongtermapos/3763282.html [accessed 20 October 2012]

Earlham Sociology Pageshttp://www.earlhamsociologypages.co.uk/pressure.html [accessed 20 October 2012]

British Insurance Brokers Associationhttp://www.biba.org.uk/PDFfiles/Manifesto2011.pdf [accessed 20 October 2012]

Economics Helphttp://www.economicshelp.org/blog/848/economics/savings-ratio-uk [accessed 18 October 2012]

Daily Telegraphhttp://www.telegraph.co.uk/finance/jobs/9614219-UK-unemplyment-rate-falls-to-7.9%-

reaction.html [accessed 10 October 2012]

Trading Economicshttp://www.tradingeconomics.com/united-kingdom/consumer-confidence [accessed 18 Oct 2012]

Financial Services Authorityhttp://www.fsa.gov.uk/pubs/other/cass_risk.pdf [accessed 20 October 2012]

Documents

Final 990 Coursework Specimen Guide 07-12-12