specimen coursework assignment and answer
TRANSCRIPT
990 Exemplar 1
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.
990 Exemplar 2
CONTENTS
Specimen Assignment .................................................................................................. 3 Specimen Template and Answer ........................................................................... 4
990 Specimen Coursework Assignment
990 Exemplar 3
Coursework – assignment Submission Rules Before commencing work you need to fully familiarise yourself with the instructions’,
including: • 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
Assignment Provide a brief context for either an insurance organisation or a division of an insurance
organisation with which you are familiar. For this organisation or division:
Explain the strategic planning process.
Conduct a political, economic, social and technological analysis (PEST). Based on
this, identify and justify three major challenges.
Make recommendations to respond to these challenges.
990 Specimen Coursework Assignment
990 Exemplar 4
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
Note: You are recommended to discuss your own organisation, or one that is familiar to you.
Your answer is confidential to the CII and will not be shared. For this exemplar answer, which is widely publicised, a fictitious company has been chosen so as not to highlight any particular
company.
To be completed before submission:
Word count: 3,185
Start typing your answer here:
Context
This answer is based on my employer, a UK-based, 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.
990 Specimen Coursework Assignment
990 Exemplar 5
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.
Over the next five years, the brokerage has strategic objectives of increasing revenue by 50%.
It intends to open further offices, and make selected acquisitions.
The Strategic Planning Process for Our Organisation
Our strategic planning process addresses three themes:
What is it that we do?
Who are our stakeholders?
How can we achieve excellence?
The key components of the strategic planning process are the establishment of our vision
(often a long term aspiration), our mission (a more precise statement of how we can achieve
the vision), our values (what is really important to us) and the strategies we can adopt to
achieve our goals and objectives.
The company has a strategic plan, formulated and agreed at Executive (Board) level, 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.
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 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.
The aim of strategic planning is to ensure that finite resources of the organisation are applied
efficiently to maximum effect. After evaluating the various strategic options as provided by the
management, with regard to their risks and potential financial returns, the Board approves the
company’s strategic objectives and then monitors the progress made to achieve these objectives
using a balanced scorecard approach.
990 Specimen Coursework Assignment
990 Exemplar 6
An essential element of strategic planning is the concurrent analysis of the company’s internal
and external environments, for example by using a Political/Economic/Social/Technological
(PEST) analysis, a strategic planning tool, to assess the external (macro) environment.
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.”
PEST Analysis
There are several variants of this strategic planning tool, including PESTLE (a PEST analysis
plus legal and environmental issues), but as instructed only a PEST analysis is being provided.
1. Political
(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. The
government also intervenes directly in the UK Insurance Market through schemes,
such as Pool Re (a high level compensation fund in respect of terrorism) and Flood
Re (a fund in respect of flood risks).
Until January 2004, the general insurance broking market was a self regulating
industry. However, through key legislation, the government imposed a new regulatory
regime initially through the Financial Services Authority and now, through the
Financial Conduct Authority (FCA). In addition the Motor Insurers Bureau and other
bodies also exert an influence on the insurance market.
All of the above means that our operations are subject to widespread and increasing
regulatory controls and legislation that must be understood and adhered to. There are
990 Specimen Coursework Assignment
990 Exemplar 7
significant costs involved in achieving this, and also potential costs and penalties if we
fail to do so.
(ii) Coalition government
At time of writing (late 2014), 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, 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....”
For our organisation, the implication of a coalition government, in particular in long-
term policy matters, such as pensions provision and the role of the National Health
Service (NHS), are that greater consistency will be achieved allowing our organisation
to set longer term strategic objectives and resource allocation. This is because the
polarisation of single party policies is often avoided and a centralist policy adopted.
(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 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 2014, there is a certain amount of optimism about the Economic
recovery. HM Treasury, in ‘Forecast for the UK Economy: A Comparison of
Independent Forecasts’ (March 2014) suggested a significant improvement in UK
employment figures and in July 2014 the average UK employment rate was 6% (down
990 Specimen Coursework Assignment
990 Exemplar 8
from 7.6% in November 2013).
Economic output in the UK, in the first two quarters of 2014, exceeded that of the first
two quarters of 2008. This means that the UK Economy will have fully recovered from
the most prolonged recession in modern times. There are also positive signs
regarding Gross Domestic Product (GDP) growth and inflation figures are also lower
than expected.
Despite this positive outlook in terms of unemployment and GDP, there is still
downward pressure on wage and salary levels, and a reduction in overall living
standards.
Given the reduction in overall living standards and a continuingly uncertain economic
climate our personal lines customers are experiencing continuing difficulties with
many of them carrying high levels of personal debt. There is still some uncertainty in
the economic outlook, as levels of business investment and exports are still weak.
Therefore, our business will continue to experience challenges due to the following:
Increased claims frequency
Particular hardship in some business sectors, for
example, construction
Greater demand for certain types of insurance
Reduced public service provision
Skills shortages in some business sectors.
(ii) Consumer confidence
Due to worry about levels of personal debt, British consumer confidence is still very
low at the end of 2014. According to the Money Advice Service, 8.8 million people in
the UK live with severe financial difficulties. Of that group, 1.5 million (17%) are
currently accessing debt advice. If people do not feel confident in the future of the
economy they are less likely to make major purchases, such as houses and cars.
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
990 Specimen Coursework Assignment
990 Exemplar 9
asset values which in turn reduces our commission based income.
The Financial Conduct Authority (FCA) has adopted the former Financial Services
Authority’s (FSA) Client Money and Asset Report, which 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).
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 fact that finance may be harder to
obtain. Servicing the debt will also be harder should we make acquisitions. 3. Social
(i) Demographics
The UK workforce is dynamic and constantly evolving. According to a report by
Poverty.org.uk, in their Work and Gender section (2013), the UK workforce is now
more diverse with a greater percentage of women in work, people working more
flexible hours, home working becoming more common and people changing 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.
(Pension calculator. 2013).
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 (2013) Tejvan Pettinger defines
Household Savings Ratio as “The percentage of disposable income that is saved”.
990 Specimen Coursework Assignment
990 Exemplar 10
The blog is illustrated by a graph showing how the ratio declined from the mid 1990’s
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.
(iii) 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 (2013).
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.
These 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.
990 Specimen Coursework Assignment
990 Exemplar 11
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 to communicate. Financial service organisations
therefore 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.
(iii) Availability of information
Information is becoming increasingly available, often at little or no cost to consumers,
suggesting 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.
Three major challenges which have significant long‐term implications for our company and are
not a ‘business as usual’ approach are now identified and justified below. 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.
990 Specimen Coursework Assignment
990 Exemplar 12
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.
2. Corporate Social Responsibility (CSR)
CSR has been defined above. The justification as to why it is felt that this is a major
challenge for our business is that it is essential that the competing requirements of our
diverse stakeholders are reconciled. There is a danger that CSR is narrowly focused by a
response to regulatory pressure rather than operating to meet the needs of all
stakeholders, including the expectations of both shareholders and our customers. If CSR is
not addressed, we are in danger of pursuing a short-term strategy without due regard for
long-term growth and prosperity.
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. Recommendations to Address These Challenges
Government influence and provision of services
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. This will enable us to keep ahead of inevitable changes in government
provision, providing us with an advantage over our competitors.
In addition, there appears to be a shift in service provision from central and local government to
charities, welfare groups and social enterprises. Our task is to ensure we are engaging with
these potential new service providers and ensuring we respond to their specific insurance and
990 Specimen Coursework Assignment
990 Exemplar 13
risk needs and requirements.
CSR
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. The key benefits of CSR for businesses have been identified
as:
Improved financial performance
Enhanced image and reputation
Increased sales and customer loyalty
Increased ability to attract and retain employees
Reduced regulatory oversight
Easier access to capital.
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.
IT
It is recommended that, in the strategic planning phase, we must clearly identify 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 whether we need
a specially designed ‘bespoke’ system, or if 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’.
990 Specimen Coursework Assignment
990 Exemplar 14
A key recommendation 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
The analysis above illustrates the importance of strategic planning and the use of strategic
planning tools, to analyse the external environment, determine the key business challenges and
make appropriate recommendations to address the challenges. In doing so, this will ensure that
we take a long-term view, rather than responding to the immediate, short-term challenges that
may affect the day-to-day operation of our business.
The external environment is constantly changing. It is therefore important that we keep testing
our business strategy against the existing business conditions and are flexible enough to make
improvements. A formal PEST review, such as the one illustrated above, is normally conducted
on an annual basis.
Aligning our strategic objectives with the external environment ensures any competitive
advantage can be sustained over the long term. In addition, mistakes can be avoided by doing
the right thing and focusing on business activities which are aligned with the external
environment.
990 Specimen Coursework Assignment
990 Exemplar 15
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
British Insurance Brokers’ Association
http://www.biba.org.uk/PDFfiles/Manifesto2011.pdf [accessed 28 Oct 2014]
Channel 4
http://www.channel4.com/news/articles/politics/domestic_politics/coalition%2Bpolicies%2Bto%2B
[28 Oct 2014]
Economics Help http://www.economicshelp.org/blog/848/economics/savings‐ratio‐uk [accessed 28 Oct 2014]
Insurance Age http://www.insuranceage.co.uk/professional‐ broking/analysis/1197267/technology‐the‐rise‐broker‐platform [accessed 28 Oct 2014]
Office for National Statistics (ONS) http://www.ons.gov.uk/ons/taxonomy/index.html?nscl=Labour+market#tab‐data‐tables [accessed 28
October 2014]
Oxford Leadership http://www.oxfordleadership.com/news‐and‐events/articles/csr_article/ [accessed 28 Oct 2014]
Pensioncalculator http://www.pensioncalculator.org/21800/news/over‐50s‐spending‐power‐ decreases‐need‐for‐advice‐rises/ [accessed 28 Oct 2014]
focus%2Bon%2Baposlongtermapos/3763282.html [accessed 28 Oct 2014]
Trading Economics http://www.tradingeconomics.com/united‐kingdom/consumer‐confidence [accessed 28 Oct 2014]
http://www.poverty.org.uk/48/index.shtml [accessed 28 Oct 2014]