Business Environment: PESTLE Analysis of Beazley Plc Report

This report provides an executive summary and detailed analysis of the external environment factors impacting Beazley Plc, a European insurance company. The report utilizes the PESTLE framework to examine political, social, economic, technological, legal, and environmental factors affecting the company's operations. It explores the company's organizational structure, governance, and the importance of PESTLE analysis in understanding the business environment. The analysis identifies both opportunities and threats arising from changes in these external factors, concluding that Beazley Plc operates in a dynamic environment influenced by various external forces. The report highlights the impact of political regulations, economic growth, social trends, technological advancements, environmental concerns, and legal obligations on the insurance industry and Beazley Plc's strategic decisions. Overall, the report provides a comprehensive understanding of the external business environment and its implications for the company's sustainability and growth.

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Executive Summary
The aim of this report is to understand the external environment factors that impact on the
business. In order to understand this concept, an organization has been selected that is
Beazley Plc. This is a European company that operates in the insurance industry. The below
section provides the external analysis of the company using the PESTLE framework. That
includes analyzing political factors, social factors, economic factors, technological factors,
legal factors, and environmental factors. From the report, it is concluded that the company
operates in a versatile environment in which external forces have a direct impact on the
business operations as the company gets to take advantage of opportunities that are available
because of changes in political and technological factors and face problems because of
changing social, legal environment.

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Table of Contents
Introduction................................................................................................................................3
Beazley PLC...............................................................................................................................3
Organization Structure and Governance................................................................................3
Importance of PESTLE Analysis...............................................................................................4
PESTLE Analysis.......................................................................................................................5
Conclusion..................................................................................................................................9
References................................................................................................................................10
Appendix..................................................................................................................................11

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Introduction
The business environment is defined as the forces that directly impact on the operations of
business and forces that are outside control of organizations. But on the other side,
sustainability, growth and overall performance of any business depend on these forces. Due
to that, it becomes important for organizations to analyze the business environment before
making strategies (Hamilton and Webster,2018). The business environment consists of the
external environment and in that microenvironment and macro environment are analyzed.
Macro environment forces are political, legal, economic, technological and environmental.
Microenvironment forces are suppliers, customers, market intermediaries, employees, and
competitors. It is important for companies to analyze these forces in order to assess the
change and its impact on their business operations.
This report is based on the analysis of Beazley Plc.; it is a European company that operates in
the insurance industry. The report gives a brief idea about the organization structure and
governance of Beazley. Further, external analysis of the company is done using the PESTLE
analysis tool in order to identify forces in the insurance industry in the UK that can impact on
the operations of the company.
Beazley PLC
Beazley Plc is a European company that offers insurance services such as life, health, marine
insurance, and professional liability, management liability and environmental liability. The
company operates in the US, Europe, the Middle East, and Asia. Beazley Plc was founded in
1986 in Jersey and tax resident in Ireland. Further, it is listed on London Stock Exchange as
the company is divided into six segments that are Marine and Aviation, Cyber and Executive
risk, reinsurance and specialty lines, accident and contingency, property, and political. In
2019, the company earned a net premium of $2,503 million and net investment income was
$263.7 million and the company had profits before tax of $267.7 million.
Organization Structure and Governance
In 2019, the insurance industry went through major changes and this impacted on Beazley.
Due to that the company changed its organization structure, top-level executives and updated
its specialty lines division for growth of a business. Beazley changes its management that

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includes both at an executive level and board. Two executives were appointed internally and
two from external sources.
Sully Lake – Group Finance Director
Lou Ann Layton – Group head of marketing and broker relation
Jerry Sullivan – Chair of the US management committee
Richard Montminy -Head of Property
Andrew Horton – Chief Executive officer
Beazley board consist of 11 directors (7 male and 4 female), the directors of the company
take their responsibilities in accordance with section 172 of the Companies Act. The core
values on which the company operates are integrity, professionalism, dynamic and
effectiveness (Figure 2). The board of directors of the company are effective and experienced
that includes audit and risk committee, nomination committee, remuneration committee, and
executive committee. The roles and responsibilities of all the committee and director area
separate that helps in maintaining trust and integrity on board decisions.
Importance of PESTLE Analysis
PESTLE analysis is a tool that helps companies to understand the external forces that impact
the operations of the business. This helps the company to make strategies for growth by
considering the changing environment of the industry (Hitt et.al,2016). It is important for the
business because of the following reasons such as:
Deeper Understanding: This analysis provides a deeper understanding of management and
decision-makers about the business environment. When any company wants to target a new
market or develop a new product, this tool helps in strategic thinking by understanding
various factors such as technological factors in the industry, changes in law, and target
market behavior (David and David,2016).
Cost-effectiveness: This tool is cost-effective as there is no such cost incurred for analyzing
the external environment. The only cost of PESTLE analysis is the efforts and time of an
individual. But the return is more from the analysis as the company gets an idea about its
competitors and what is going in the market (Hit et.al,2016).

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Identifying opportunities: At most this tool helps the business to identify opportunities in
this changing environment. For example, the shift of most of the people to the urban segment
is an opportunity for the insurance company because this will leads to an increase in the
target market of the company and hence increase its market share and sales. PESTLE is a
beneficial tool for companies to know the opportunities that help them to grow and sustain in
the market.
Alertness Development: By analyzing external factors the company gets an idea about
possible threats in the market. For instance, in the insurance industry use of technology brings
higher risk about privacy and security of data. In order to overcome this threat, the company
needs to formulate different strategies. Hence, this tool supports strategic planning with the
motive to take precautions for threats.
PESTLE Analysis
The PESTLE analysis is a tool developed by Harvard professor Francis Aguilar to know the
external forces in the business environment of any industry for which information is
available. This is considered a significant step for framing a strategy that can effectively
maneuver the competition to increase an organization's chance of profitability and
sustainability. “PESTLE is an amalgam of initials of various factors that not only affect
Beazley Plc but the entire industry as a whole these factors are named as Political, Economic,
Social, Technological, Environmental and Legal.
Political Factors (Opportunity)
The political factors include political stability, changing regulations, political pressure, and
terrorism. Some of the political factors that impact the insurance industry are changes in the
regulatory framework, pressure on the solvency of social security, terrorism, and geopolitical
instability (Cummins et.al,2017). The financial crisis at the global platform leads to
communication between the US, Europe, and other developed countries. These countries are
trying to harmonizing the global insurance regulations that resultant in greater standardization
of policies and products in the insurance industry.

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Another political factor is the pressure of government on welfare programs and social
security. This will create opportunities for Beazley in the life insurance segment as
government support will be more. Further, the expenditure by the government on the
development of society in the long and short-run also impact on the insurance company, For
instance, the government in European countries for social care spending huge amount in
insurance sector due to that company like Beazley Plc will gain opportunity from leniency in
policies and programs.
Economic Factors (Threat)
Economic factors are the growth of the economy, standard of living, investment criteria used
by people, and income level of people. Any changes in these factors directly impact the
insurance industry. The slowing economic growth of European countries mainly the UK,
Germany, and France impacts the insurance sector but a marginal increase in consumer
spending is a positive signal for companies that are operating in the insurance sector. Further
variables that impact the operations of Beazley Plc are ease in the monetary policy of
countries, Brexit negotiation and trend to populism in 2019 elections impact on the strategy
of the company. But from the past records it has been seen that Europe's insurance market is
improving but at the slow pace and as compare to the rest of the world the country has not
that achieved the growth in this sector.
Figure 1: Insurance sector Growth in Europe

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Source: (Pwc,2019)
Social Factors (Threat)
Social factors are related to the behavior, attitude, and habit of the target audience. In the
insurance industry, some of the social factors are customer expectations and social networks.
As in the insurance sector, consumers are demanding transparency, speed, and simplicity in
business transactions. The increasing use of the online and offline platform and continuous
use of mobile technology will lead to a change in the expectations of customers. Due to this
changing in customer expectations Beazley Plc has to change its strategies and start focusing
on selling more products through an online platform with fewer intermediaries. As nowadays
customer in the insurance sector is demanding speed in transactions, more products, and
transparency (Beazley,2019).
Another factor is a social network, as rapid evolution and adoption of social networks
affecting the mindset of customers and businesses. This increases the buying power of
customers for virtual communities. Consumers become more aware of products and services
because of increasing awareness through social sites such as Facebook, and Twitter changing
the way insurance companies run.

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Figure 2:
Source: (Ochel and Wegner,2019)
Technological Factors (opportunity)
Automation and technology is a new wave that is impacting on industries. The insurance
industry is also affected by technological factors. As the number of insurtech is increasing in
the country because of the increasing use of tablets and smartphones, the use of computing
power and storage and growth in active sensors. The impact of technology can be seen in
Beazley Plc as the company needs to change its strategies such as the use of detectors and
software in order to store data and information of customers. Further, it is analyzed that the
use of internet-connected things and devices will be 50 billion by 2020 (Braun and
Hass,2019). That proves to be an opportunity for Beazley Plc as the company can target
audiences that are mobile users. Moreover, the company can use high technology for
improving customer experience and processing insurance transactions.
Figure 3: Use of technology in the insurance sector

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Source: (Braun and Hass,2019)

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Environment Factors (opportunity or threat)
The frequency of man-made and natural disasters has been increasing over the past 20 years.
The impact of these can be seen on marine and property segments as the rate of insurance in
this segment is increasing. Managing these risks and activities becomes a major concern for
insurance companies. Due to increasing man-made and natural disasters, Beazley Plc can get
the opportunity in its marine and aviation segment with a motive to provide security and
safety to livelihood and assets (Genovese and Tvinnereim,2019). Further, Beazley Plc can
give reliable post-incident relief to customers and can settle their claims. The changing
environment factor is an opportunity as well as a threat to the company as these global issues
need to be addressed as soon as possible. But on the other side, insurance companies play a
major role in the society and community by offering them reliable relief and financial wealth
and health assurance.
Legal Factors (Threat)
The legal issues in the insurance industry are common as companies in this industry have
some legal obligations that need to be fulfilled on time in accordance with the law in the
country. The main factor in the legal aspect is the safety and security of data of customers as
big data industry is growing and due to that frauds and data breach in this industry becomes a
common threat for insurance companies (Sharma and Rotthoff,2019). Further, in insurance
in the industry, the laws related to data protection, discrimination laws, health and safety of
employees and product prices and transparency to its customers are some criteria that need to
be followed by companies operating in this segment. Any changes in these factors directly
impact the operations of Beazley Plc (Somers, 2019).
Conclusion
It is concluded from the report that it is important for companies to analyze the external
business environment using the PESTLE framework because it helps companies to identify
threats and opportunities in the industry for the company and information collected through
analysis helps in for decision making for top-level executives. From the PESTLE analysis of
Beazley Plc, it is known that political and social factors bring opportunity for the company
and remaining factors are a threat in the insurance industry and the Beazley Plc needs to take
precautions in order to reduce the impact of these forces on its operation.

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References
Beazley,2020. About us. Retrieved From:
https://reports.beazley.com/2019/static/pdf/beazley-annual-report-2019.f88fc08f.pdf
Braun, A. and Haas, M., 2019. On-demand insurance: A relevant alternative to standard
products?. Innovation in the European Insurance Industry, 39(4), p.2025.
Cummins, J.D., Rubio-Misas, M. and Vencappa, D., 2017. Competition, efficiency and
soundness in European life insurance markets. Journal of Financial Stability, 28, pp.66-78.
David, F. and David, F.R., 2016. Strategic management: A competitive advantage approach,
concepts and cases. Pearson–Prentice Hall.
Genovese, F. and Tvinnereim, E., 2019. Who opposes climate regulation? Business
preferences for the European emission trading scheme. The Review of International
Organizations, 14(3), pp.511-542.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford
University Press.
Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2016. Strategic management: Concepts and
cases: Competitiveness and globalization. Cengage Learning.
Ochel, W. and Wegner, M., 2019. Service economies in Europe: Opportunities for growth.
Routledge.
Pwc, 2019. STEEP Drivers in insurance industry. Retrieved From:
https://www.pwc.com/gx/en/insurance/pdf/insurance-2020-turning-change-into-
opportunity.pdf
Sharma, G. and Rotthoff, K.W., 2019. The impact of unexpected natural disasters on
insurance markets. Applied Economics Letters, pp.1-4.
Somers, F., 2019. European Business Environment: Doing Business in Europe. Routledge.