Business Environment Report

This report analyzes the business environment of Aviva Plc, a leading insurance company, using a PESTLE framework. It examines the company's structure, governance, and how external factors like political, economic, social, technological, environmental, and legal influences impact its operations and profitability. The report provides insights into the challenges and opportunities Aviva Plc faces in the insurance industry.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Describe the structure of the company, its management and how it is governed........................1
(A) Overview of the company including its history and structure and how it is managed at
national level..........................................................................................................................1
(B) Brief discussion of how the company is governed...........................................................3
2. Analysis effect of external environment factors on the selected business...................................5
Importance of conduct PESTLE analysis in the organisation................................................5
3. Briefly discuss the PESTLE factors.............................................................................................5
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment consist several elements and perspective which influence to take
decisions in the enterprise. It can be forces with economic, social, political and technological
aspects which create impact on the organisation (Biener, Eling and Wirfs, 2016).
In this context, present report based on the Aviva Plc which deals in insurance sector. It is
British multinational company and headquarter exists in UK. It has around 33 millions customers
in different areas of 16 nations. In UK, it is the largest general insurer and leading life and
pension provider.
For gaining insight information of the present report, it covers structure of the chosen
organisation to promote operations in different areas. Furthermore, it includes effects of external
environmental factors on the selected business.
MAIN BODY
1. Describe the structure of the company, its management and how it is
governed
(A) Overview of the company including its history and structure and how it is managed at
national level
Aviva Plc is UK based insurance group whose association considered from 1834. They
govern risk through group wide policies and business standards. The chosen company is
premium listing on the London Stock Exchange so that they required to disclose compliance with
UK corporate governance code. Their Board believes that they have fully compliant with the
code throughout 2017. Details of compliance with the code also preceding in a particular year in
Corporate Governance Section. They also possess clear roles, responsibilities which delegated in
different authorities. With the help of establishing and operating control, management assess
risks. Board also delegated day to day risks management in a particular group. Line management
of the enterprise also accountable for risk management which assists to identify risk function
with internal audit (Hair Jr, Wolfinbarger and Page, 2015). Furthermore, internal control of the
chosen business facilitate effective and efficient business operations, development robust with
reliable internal reporting and compliance along with rules and regulations.
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The chosen organisation playing leading role in digital revolution of insurance and
intellectual property. It creates significant impact that assists to deliver growth of 14%. In this
context, long term relationship in UK maintained successfully. It helps to improve significantly
quote and experience generated for new generation of insurance products. Proposition also takes
subscription which can be successfully applied insurance and expected to be progressively. In
many countries, this enterprise working as joint venture so that it assist to look for better work
(Batkovskiy, Makarov and Khrustalev, 2015). It is UK based insurance group in which
association develop successful work from 1834. They are also served with 33 million customers
in more than 16 nations in all over the world.
Strong system of governance develop throughout the group which is important to ensure
that organisation run smoothly. It helps to attain effective decision making which support Aviva
Plc to accomplish their objectives. Long term success is also useful perspective that management
make strategic aims, ensure appropriate system of governance, setting value to support culture
(Hunter, Saunders and Constance, 2016).
Aviva Plc assess operational risks and adequacy operating effectiveness to control and
implement change to manage and mitigate it. This is because, it is an integral part of the group's
operational risk and control management framework. Group wide reporting is manual relation to
the international financial reporting standards (IFRC). Along with this, reporting requirements
completed with financial reporting control framework (FRCF). It is relates with preparation of
reliable financial reporting (Biener, Eling and Wirfs, 2016).
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Frameworks of Aviva Plc are important to help and manage risks that assist to
accomplish objectives. They are designed to assess and manage instead of eliminate risk of
failure. It helps to attain more desired level of objectives that are reasonable and absolute
assurance against material. Regularly review of frameworks assists to comply financial reporting
guidance on risk management, internal control and related business reporting. There are
generally three group level management committees designed that helps to members of group
executives to delegate authorities (Gitman, Juchau and Flanagan, 2015). Asset liability
committees chaired by chief capital officer. It assists to meet with responsibilities to manage
group performances and liquidity with risk. Operational risk committee chaired to focus and
supports with key operations that overseeing group operational risk profile. It monitors specific
operational and conduct risks which impact on group reputation.
(B) Brief discussion of how the company is governed
Aviva Plc is governed by their board of directors so that in this aspect hierarchical
structure followed. Adrian Montague is chairman of the company. He is board of director and
non-executive director of the enterprise from January 2013. On 20th November 2012, the chosen
organisation announced CEO of Aviva Plc who is Mark Wilson. After him, in April 2015,
Adrian has been chosen as chairman of the enterprise. In board, there are 12 members are
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Illustration 1: Governance structure
(Source: Our governance, 2018)

appointed in which first is chairman, seven members are independent non-executive directors
and four members are executive directors appointed.
Stakeholders are independent part with whom each of those make wager deposits the
money or counters wagered. In the chosen business, there are several stakeholders take
participation such as investors, customers, government, employees, suppliers, etc. Board of
director possess relationship with several numbers of stakeholders such as shareholders,
employees and public.
 Relationship with shareholders: Board of director need to maintain their relationship
with shareholders through provide them appropriate amount of dividend. Furthermore,
more benefits encourage them to invest in the business which assists to develop Aviva
Plc profitability. Furthermore, range of issues also communicated with shareholders so
that they can easily accomplish desired level of results at workplace.
 Relationship with employees: In addition to this, relationship also need to maintain with
employees to provide them several benefits regarding their development and security in
the job.
 Relationship with public: For public, they have to maintain corporate social
responsibilities which assists to maintain their loyalty towards the organisation.
Disclosure committees chaired by CFO. Their role is to take support in group that ensure
timely and accurate announcement that are made by group to maintain its security. Different
committees work for distinctive work that explained under here: Risk committee: Risk committee helps to the board which oversee risk and assess it
across the group. It helps to make recommendations to the board. Governance committee: Government committee works closely with risk committee that
assists to board oversee operational risk across the group. It helps to deliver good
customer relationship (Jackalas, Martins and Ungerer, 2016).
 Audit committee: It is working closely and responsible to assists board to meet with
responsibilities. Hence, it integrates financial systems of internal financial controls,
monitoring effectiveness, performance and objectives with internal and external auditors.
Responsibilities and activities of different committees set with respective reports in
annual report and accounts (Lock and Seele, 2015). It assists to mitigate risks in systematic
manner to attain more desired level efficiency and outcomes.
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In addition to this, Aviva Plc consider different types of insurance plan that offers in wide
variety to customers. As a result, structure is carried accordingly that leads the market in
protection and child plan with world class products and strong sales force (Jackalas, Martins and
Ungerer, 2016). Insurance plans: Aviva Plc consider insurance plans that cater to all basic needs and
requirement of the customers. It is very competitive that take care of all necessities for
customers with insuring against sorts of all risks (Hunter, Saunders and Constance,
2016). Plans for individuals: The enterprise consist wide range of life insurance plans to cater
needs of each individual. With the help of these plans, against financials constraints
different kinds of insurance offers successfully. In this regard, different kinds of plans
generally offers by Aviva Plc such as saving plan, retirement plan, child plan, rural plan,
etc. (Hair Jr, Wolfinbarger and Page, 2015).
 Group insurance plans: Group insurance plans are special that cover in a particular
group within the organisation or member of association. Plan can be successfully carried
in term of term insurance, gratuity/leave encashment, rural/credit, etc. Therefore,
successful operations and functions in Aviva Plc carried with different premium plans
(Gitman, Juchau and Flanagan, 2015).
2. Analysis effect of external environment factors on the selected business
Importance of conduct PESTLE analysis in the organisation
PESTLE analysis consider strategic tool that assist to analysis macro environment in the
business. It stands for political, economic, social, technological, environment and legal factors
that impact on Aviva Plc. Changes in these factors create direct impact on the organisation and
shape strategy with competitive landscape level in the whole industry. With the help of this
analysis, great details provides to face operating challenges with competitive forces. For
instance, it is highly profitable with strong growth in unstable political environment (Biener,
Eling and Wirfs, 2016).
3. Briefly discuss the PESTLE factors
It includes following elements that create impact on the chosen enterprise:
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 Political factors: Political factors consider significant role to determines elements that
can impact on Aviva Plc. It is long termed profitability in certain nation or market. It is
operating in insurance so that it expose with different kinds of political environment and
systems. Success can be accomplish as dynamic insurance industry across the different
nations that diversify systematic risks of political environment. It is closely analysis
factors such as political stability and importance for the insurance sector of the country.
Furthermore, there is wide risk of military invasion (Hunter, Saunders and Constance,
2016). Due to high level of corruption regulations also create major issue in financial
sector. Legal framework for contract enforcement is one of the element of political factor
so that it helps to develop significant results at workplace. Pricing regulations are also
related with regulatory mechanism for financials. Along with this, industrial safety
regulations in the financial sector are major perspective that impact on the chosen
organisation. Product labelling and other requirements in insurance create major impact
before entering and investing in certain market (Lu, Wang and Kweh, 2014). Trade
related regulations and tariffs related financials are major perspective that are closely
determines with different markets. Moreover, wage legislations must be implement with
minimum wage and overtime. Main benefit to the company is political stability in the
country that assist to focus on government regulations to the financial service industry. Economic factor: Economic factors are also major perspective in the nation. For
instance, inflation rate, savings rate, interest rate, etc. (Jackalas, Martins and Ungerer,
2016). In economic cycle aggregate demand and investment exist in the economy that
create impact on Aviva Plc. Micro environment factors such as competition norms create
impact on competitive advantage of the enterprise. Aviva Plc can use elements of
economic factors for example growth rate, inflation and economic indicators, etc. Type of
the economic system is also major perspective in front of the chosen business to assess
that how stable it is. Government intervention in the free market and related financial also
impact on the results (Harangozó and Zilahy, 2015). UK has effective efficiency of
financial market so that it helps to raise the capital in local areas. Infrastructure quality in
insurance industry is also important that assists to meet with comparative advantages. In
the host country and financial sector in particular nation must be continuous develop to
focus on competition norm. Economic growth rate, discretionary income, unemployment
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rate, etc. elements create negative impact on the results of country (Aviva Plc PESTEL &
Environment Analysis, 2018). Economic performance of UK is positive so that it
influence income levels and purchasing behaviour of consumers as well. Social factors: In the society, there are several factors exists that impact on Aviva Plc.
This is because, culture of each society consist way to do work it impacts on population.
It plays great role that how marketers understand customers in the particular market and
design message for insurance industry. Social factors of the leadership based on
demographic and skill level of population. As a result, Aviva Plc has responsibility to
assess class structure, hierarchy and power which exists in particular society.
Furthermore, culture is also based on the different perspective that assists to focus on
gender roles. Social conventions, etc. Entrepreneurial spirit and broader nature of the
society encourage people to do their work in proper manner (Gitman, Juchau and
Flanagan, 2015). Attitude also assists in which health, environmental consciousness, etc.
measure that create impact on the results. Customer demand and requirements change
day by day so that on the basis of leisure interest insurance industry must focus on
customer perspective. Social status of UK people also determine choice of different
insurance services which assists to focus on development of the country. Mainly car
insurance develop in successful manner which require to focus on the desired level
efficiency. It assists to gain more effective work to work with different kinds of
customers (Lock and Seele, 2015). Technological factors: Technology is fast disrupting in the different industries in
particular board. There are different industries establishes to give chance and cope up
with the changes in successful manner. Aviva Plc has not considered technological
analysis but also develop significant advantages in the whole business. It assists to
increase more profitable results and outcomes that assists to cope up with distinctive
roles. It includes recent technological development that develop by competitors of Aviva
Plc. Technology also create impact on products that are offering to the particular nation.
Advance technology of the country also create impact of cost structure of the whole
industry that assists to understand significant advantages at workplace (Awan and Tahir,
2015). It impacts on value chain structure in the financial sector that give more rate on
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technological diffusion. Internet technology mainly considered to influence people to
access appropriate services of insurance in the enterprise. Environmental factors: In the different areas of the world, distinctive norms and
standards exists that create impact on the profitability. In the UK, different environmental
laws and liabilities exists that assists to focus on the appropriate working system. In this
consideration, before entering into new areas, existing market must carefully evaluate
environmental standards that are needed to operate in these markets (Mwangi and
Murigu, 2015). Different areas consider distinctive weather so that it create impact on
operations and functions that are play in the selected enterprise. Laws regulating
environment pollution so that it must be reduced to consider desired results. Air and
water pollution regulations in the insurance industry impact on the selected business.
Recycling of different products create positive impact to operate in different areas of the
world. Waste management in financial sector must be identify to take support for
renewable energy. It is useful to take several advantages to make green and ecological
products (Jeucken and Bouma, 2017). In environment consideration, the chosen
insurance company need to predetermine operations and functions in the business that
helps to meet with desired level of efficiency at workplace. Environment protection is
major perspective for insurance company because of paper work. As a result, waste
management must be consider successfully that assists to focus on renewable energy.
 Legal factors: In several numbers of nations, legal framework and institutions legal
factors considered to robust enough and protect intellectual property rights in the
enterprise (Schaltegger and Wagner, 2017). Therefore, Aviva Plc must evaluate before
entering in such markets to lead with theft of the organisation. It assists to gain
competitive advantages with legal factors that considered by the chosen organisation to
enter in new market. There are different elements exists that create impact on the
enterprise. For instance, anti-trust law in insurance industry and overall nation.
Discrimination law must be followed by the enterprise to regulate their successful
operations and functions. Copyright, patent/ intellectual property law must be carried so
that it assists to focus on appropriate regulatory frameworks. Consumer protection and e-
commerce also considered in which employment law clearly discussed among different
members. Health and safety law will be successfully implemented in the organisation so
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that employee protection can be develop in appropriate manner (Hair Jr, Wolfinbarger
and Page, 2015). Data protection act also followed so that privacy can be maintained at
workplace.
CONCLUSION
From the above report, it can be concluded that Aviva Plc consider their operations in
different perspective that assists to meet with desired level of results. With this regard, report
summarised about structure and governed it by the whole enterprise. It assists to focus on the
development of the organisation that increase significant advantages with using tactics. Different
committees also exists in the chosen enterprise that work to develop significant advantages at
workplace. For instance, risk, governance and audit committees. They all are work together to
solve issues and problems of different customer to cater their needs and requirements.
Moreover, report articulated about the different elements of external environment that
assists to meet with desire level of efficiency. It included political, economic, social,
technological, environmental and legal factors that create major impact on results and outcomes
of insurance businesses. With the help of political stability, the chosen enterprise has benefit to
focus on effectiveness. It will increase significant advantages to operate functions in insurance
sector. Furthermore, report summarised about technological factors that advancing to perform
functions in Aviva Plc.
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REFERENCES
Books and Journals
Awan, A.G. and Tahir, M.T., 2015. Impact of working environment on employee’s productivity:
A case study of Banks and Insurance Companies in Pakistan. European Journal of
Business and Management. 7(1). pp.329-345.
Batkovskiy, A.M., Makarov, Y.N. and Khrustalev, Е.I., 2015. Economic protection of secure
operation and development of companies in the rocket and space industry.
Mediterranean Journal of Social Sciences. 6(4). p.414.
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.
Gitman, L.J., Juchau, R. and Flanagan, J., 2015. Principles of managerial finance. Pearson
Higher Education AU.
Hair Jr, J.F., Wolfinbarger, M. and Page, M.J., 2015. Essentials of business research methods.
Routledge.
Harangozó, G. and Zilahy, G., 2015. Cooperation between business and non-governmental
organizations to promote sustainable development. Journal of Cleaner Production. 89.
pp.18-31.
Hunter, I., Saunders, J. and Constance, S., 2016. HR business partners. Routledge.
Jackalas, M.B., Martins, N. and Ungerer, L.M., 2016. The impact of demographic variables on
organisational culture and employee motivation: evidence from a health insurance
company in Botswana. Journal of Contemporary Management. 13(1). pp.357-384.
Jeucken, M. and Bouma, J.J., 2017. The changing environment of banks. In Sustainable Banking
(pp. 24-38). Routledge.
Lock, I. and Seele, P., 2015. Analyzing sector‐specific CSR reporting: Social and environmental
disclosure to investors in the chemicals and banking and insurance industry. Corporate
Social Responsibility and Environmental Management. 22(2). pp.113-128.
Lu, W.M., Wang, W.K. and Kweh, Q.L., 2014. Intellectual capital and performance in the
Chinese life insurance industry. Omega. 42(1). pp.65-74.
Mwangi, M. and Murigu, J.W., 2015. The determinants of financial performance in general
insurance companies in Kenya. European Scientific Journal. ESJ. 11(1).
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Schaltegger, S. and Wagner, M., 2017. Managing the business case for sustainability: The
integration of social, environmental and economic performance. Routledge.
Online
Aviva Plc PESTEL & Environment Analysis. 2018. [Online] Available through:
<http://fernfortuniversity.com/term-papers/pestel/nyse4/7004-aviva-plc.php>.
Our governance. 2018. [Online] Available through:
<https://www.aviva.com/investors/governance-structure/>.
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