990

SPECIMEN
COURSEWORK ASSIGNMENT AND
ANSWER
990 (Insurance Corporate Management)
The following is a specimen coursework assignment question and answer. It
provides a guide as to the style and format of coursework questions that will be
asked and indicates the depth and breadth of answers sought by examiners. The
answer 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 fully
familiarise 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 unit
for which you have enrolled. The aim is that you should thereafter be able to apply
this learning in the workplace.

CONTENTS
Specimen
Assignment...................................................................................................................3
Specimen answer.........................................................................................................4

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Insurance corporate
management
Coursework assignment
Submission Rules
Before commencing work you need to fully familiarise yourself with the Candidate coursework
assessment 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 not
answering in sufficient depth and will affect the marks allocated for components in the
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 marks are
only allocated for answering the question
Reread your answer to ensure it is logically structured and that you have added value by
making 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 are
familiar. 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/or
negative for the organisation. Discuss in detail the implications of these challenges for the
organisation and how they might be addressed.

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Assignment answer template

Before commencing work you need to fully familiarise yourself with the 'Candidate
coursework 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 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
not answering in sufficient depth and will affect the marks allocated for components in
the 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 marks
are only allocated for answering the question
Reread your answer to ensure it is logically structured and that you have added value by
making sufficient conclusions and recommendations
Failure to follow the guidance and instructions could result in you failing this unit
Additional note:
The following Answer does not disclose the name of the broker. However, unless there are
reasons relating to commercial sensitivity preventing you from naming the organisation, you
may do so, bearing in mind that answers are subject to CII confidentiality.
To be completed before submission:
Word
count:

2,894

Start typing your answer here:

Context
This answer is based on my employer who is a UK regional insurance broker engaged in
marketing, selling and servicing life and non-life products for customers in the small and medium
enterprises (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 staff
through incentive awards.
The brokerage was formed in 1985, initially trading from a single office, and has expanded both
organically and by acquisition to its current size of four offices, each located in a major town, with
55 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

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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 to
strategically position the business for the next five years. The strategic plan draws on the
previous plan and adjusts it by taking into account changes in the external environment, changes
in internal capabilities and progress in delivering the current strategic plan.
The strategic planning process follows a prescribed format which, given the relatively small size
of 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 their
risks and potential financial returns, the Board approves the companys strategic objectives and
then monitors the progress made to achieve these objectives using a balanced scorecard
approach.

Introduction to Political/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 and
Whittington 2008).
However an essential element is the concurrent analysis of the companys internal and external
environments, for example by using a PEST analysis to assess the external (macro)
environment, and then complementing this with a SWOT (Strengths, Weaknesses, Opportunities
and Threats) analysis to help determine which external developments can be best exploited. An
example PEST analysis, based on a review of the companys current external environment, is
provided below.
As Bensoussan and Fleisher (2008) state The output of any analysis should be actionable, that
is 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 their
importance to the business or because there is evidence to suggest that they will become
significant during the next few years.
Johnson, Scholes and Whittington (2008) state Key drivers for change are the high impact
factors likely to affect significantly the success or failure of strategy.

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PEST Analysis
1.
2.
3.
4.

Political/Legal
Economic
Social
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 is
particular regulatory involvement given the importance of some products to the lives of
individuals, e.g. investment related and long term insurances for individuals (pensions
and 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 is
reflected in the UK through the existence of organisations such as the Financial
Services Authority (FSA), Motor Insurers Bureau and other bodies. This means that
our operations are subject to regulatory controls and legislation that must be
understood 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 party
majority government in the UK, by contrast has tended to produce polarised,
alternating, policies. Such majority governments have resulted in appreciable changes
in direction and policy. Nick Clegg the Deputy Prime Minister in an interview (Channel
4 2010) stressed the need to move away from the here and now and move towards
what 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 that
greater consistency will be achieved allowing our organisation to set longer term
strategic 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 seeking
to influence both governments and businesses. For example the environmentalist
lobby on big business energy consumption, climate change campaigners, executive
pay activists and protesters against genetically modified crops.
The Daily Telegraph (2012) divides these into various categories and it is important our
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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 pressure
groups and others. This is of particular importance where the issues impact on our
clients, for example pharmaceutical companies and energy companies. There may be
times when we have to review our client base to determine if it is sensible to retain
certain organisations as any financial gain may be out-weighed by potential
reputational loss.

2.

Economic
(i)

Job growth and unemployment

As at October 2012, the UK unemployment rate is 7.9% (Telegraph 2012). Opinion
varies as to whether this rate will increase or decrease up until the end of 2012. The
optimists believe that it will further decrease to around 2.5 million people as private
sector employment outweighs the loss of public sector jobs. The pessimists believe
that unemployment will increase to around 2.7 million people as the economy is not
showing signs of improvement, firms are hanging on to experienced workers and
public sector job losses will be greater than private sector growth.
This uncertain economic climate has resulted in downward pressure on wage and
salary levels, and a reduction in overall living standards.
As a consequence of unemployment in general and an uncertain economic climate our
business will experience challenges because of the effects on our customers who may
experience:

(ii)

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.

Consumer confidence
If people do not feel confident in the future of the economy they are less likely to spend
with major purchase decisions, such as houses and cars, being deferred.
Between December 2011 and January 2012, consumer confidence fell sharply and
was the largest monthly fall since 1994 (Trading Economics 2012).
The effect on our business is that, when individual customers delay investment and
purchasing decisions, less insurance coverage will be required due to lower overall
asset values which in turn reduces our commission based income.

(iii)

Financial resources
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The Financial Services Authority (FSA) in a Client Money and Asset Report drew
attention to a number of matters in 2010 which still apply. Investment income for all
businesses has been reduced following a sustained period of low interest rates. This
may increase the temptation to take greater risks with company assets (potentially
including client monies) FSA (2010).
In addition, the availability of loan capital to purchase business assets is restricted
following the banking crisis and the loss of confidence in the banking sector.
This has two implications for our business. Firstly, we need to be aware of the risks
involved in looking after and not risking our own assets that are needed to operate our
business and also to ensure that client money is properly protected. Secondly, our
strategic planning needs to take account of the situation that finance may be harder to
obtain and service should we be planning acquisitions.

3.

Social
(i)

Demographics
The UK workforce is dynamic and constantly evolving. It is now more diverse with a
greater percentage of women in work, people working more flexible hours and home
working is more common and people change jobs more frequently. There is an
increase in the proportion of part-time and temporary jobs as a percentage of the total
workforce. In addition there is an increase in the number of older workers both as a
result of the population ageing and the State Pension age being raised. For example
in a recent article it was noted that the spending power of the over 50's is decreasing
and their need for advice is increasing. (Pensioncalculator. 2012).
The changes identified above mean an increased likelihood of gaps in employment
when people will need to fund their lifestyle through savings. The implication for our
business is that we need to look at the provision of life and pension products to fill this
potential gap in the market.

(ii)

UK savings ratio
In a blog entitled UK Savings Ratio Economics Help (2012) Tejvan Pettinger defines
Household Savings Ratio as The percentage of disposable income that is saved. The
blog is illustrated by a graph showing how the ratio declined from the mid 1990s up to
2008, as householders spent and borrowed more. However, following the credit
crunch, consumers have been more risk averse and are looking to pay off debt and
save rather than spend. This has slowed the economic recovery and affects our
business in the same way as a reduction in consumer confidence.

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(iii)

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Corporate Social Responsibility (CSR)

This can be defined as:
Whereby business organisations are asked to consider and assume responsibility for
the impact of their activities on their stakeholders, for example customers, suppliers,
employees, shareholders, communities and the environment in all aspects of their
operations. Atkins and Bates (2011).
The Oxford Leadership Academy (2012) has stated that CSR should be fully pursued
even 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 staff
to take part in the wider community through initiatives such as involvement in
charitable enterprises, the provision of free advice to schools for example and taking
an active participation in community enterprises.

4.

Technological
(i)

Information Technology (IT)

Insurance brokers are dependent on IT to ensure their businesses are efficient. They
utilise IT in their interaction with clients and insurers. Many systems are fully
automated and the business of insurance is data heavy and reliant on accurate
information. As per Insurance Age (2010) brokers have to be serious about the use of
technology.
Such IT systems, both hardware and software, are expensive to set up, subject to
obsolescence and require specialist skills to maintain. These costs can be prohibitive
to small businesses that do not have a large client base over which to spread their
costs.
The implications for our business are that we will need to understand the financial
costs in the short and medium term. Any unplanned costs following a major issue with
IT could be catastrophic.

(ii)

Business Communications
Although letters, telephone conversations and face to face meetings still play an
essential role in the conduct of our business, increasing numbers of clients use social
media, e-mail and telephone applications to communicate. Financial service
organisations need to be available outside normal office hours.
We need to ensure that we fully embrace these emerging communications trends and
technological developments to ensure we are not left behind by our competitors.
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(iii)

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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 the
British Insurance Brokers Association manifesto BIBA (2011) which identifies the
added value services which an insurance broker will bring to the relationship over and
above those that the client can access for themselves.

Major Challenges
The overall PEST analysis shows that the external environment is complex and a number of
further PEST items could have been chosen.
The following three major challenges each have significant long-term implications for our
company 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. This
means individuals will have to take a greater personal responsibility for service provision.
This has important implications, as the respective roles of Government, private organisations
and individuals, will change across key areas such as education, health and medical
services and the provision of income in retirement. Private enterprise, charities, social
enterprises and others will provide more and the State less.
This provides our company with both a huge challenge and a huge opportunity. We have to
work 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 experiences
in other relevant countries. The aim is to identify the responses that financial services
industries have developed in such countries. We would then, drawing on such overseas
experiences, implement appropriate UK solutions having made relevant modifications to suit
the local circumstances.

2.

Corporate Social Responsibility (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 both
shareholders and our customers.
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The challenge for us is to place business ethics at the core of our company culture and this
may require substantial changes. Ideally such an approach has to be hard wired into the
company through values, staff selection and training, culture, process and business
relationships.
Although there is an overlap with regulatory requirements concerning
customers, we need to take a customer focused approach to ensure that we maintain at
least 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 exceed
regulatory 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 and
operation are high, as would be the implications of an unexpected failure. The challenge
facing our business is to balance the need for a system which achieves all we need it to
achieve 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 to
do across their whole life time. This involves careful projections and some assumptions, but
also 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 more
expensive 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 IT
system that meets the needs of the business. The key question we need to answer is do we
need a specially designed bespoke system, or can we find a proven IT system that
substantially fits all our present and potential needs. If we choose the latter, we may
eliminate a large proportion of the costs associated with development, maintenance and
initial teething problems.
The challenge for our business is to ensure that IT business continuity and disaster
management 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 company
utilises all appropriate strategic planning tools, including PEST, and updates the findings of the
reviews on a regular basis. This means that the company is likely to be better placed to
understand the implications of future environments and have in place the means to succeed
within them. The very future of the company may be at risk should an unexpected or unplanned
major disruptive event occur which has not been considered and allowed for in the strategic
scenario planning context.

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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 freedom
we have to respond to each challenge is variable. For example, our response to Government
influence may be constrained by legislation and regulation, whereas the range of options
available to us in responding to the challenge of IT will be much more under our operational
control.
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 and
updated as applicable with the results used to inform and influence strategic objectives and
operational 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, New
Jersey, USA

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

Johnson, G. Scholes, K. and Whittington, R. (2008) Exploring Corporate Strategy, Prentice Hall
and Financial Times, Harlow, UK.
Internet Sites
Oxford Leadership
[accessed 20 October
http://www.oxfordleadership.com/news-and-events/articles/csr_article/
2012]
Pensioncalculator
http://www.pensioncalculator.org/21800/news/over-50s-spending-power-decreases-need-foradvice-rises/ [accessed 20 October 2012]
Insurance Age
http://www.insuranceage.co.uk/professional-broking/analysis/1197267/technology-the-risebroker-platform [accessed 20 October 2012]
Channel 4
http://www.channel4.com/news/articles/politics/domestic_politics/coalition%2Bpolicies%2Bto%2B
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focus%2Bon%2Baposlongtermapos/3763282.html [accessed 20 October 2012]

Earlham Sociology Pages
http://www.earlhamsociologypages.co.uk/pressure.html [accessed 20 October 2012]
British Insurance Brokers Association
http://www.biba.org.uk/PDFfiles/Manifesto2011.pdf [accessed 20 October 2012]
Economics Help
http://www.economicshelp.org/blog/848/economics/savings-ratio-uk [accessed 18 October 2012]
Daily Telegraph
http://www.telegraph.co.uk/finance/jobs/9614219-UK-unemplyment-rate-falls-to-7.9%reaction.html [accessed 10 October 2012]
Trading Economics
http://www.tradingeconomics.com/united-kingdom/consumer-confidence [accessed 18 Oct 2012]
Financial Services Authority
http://www.fsa.gov.uk/pubs/other/cass_risk.pdf [accessed 20 October 2012]

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