Analysis of Operation Situation and Competition of UK Insurance Industry - Essay Example

The first part of the paper includes PEST and Porter Five Forces analysis while keeping in view the industry trends and environment. In addition to this, an analysis of the financial performance of the selected three insurance companies in the UK has also been performed. This activity has been carried out with the help of ratio analysis; a comparison of key financial indicators against closes competitors and industry standards.

The next part of the paper consists of a strategic analysis of the selected insurance businesses by utilizing the Strengths, Weaknesses, Opportunities, and Threats (SWOT) model. The SWOT model is considered to help determine what are the external factors and prospects that might influence the direction of the business. Additionally, the model also identifies the role of internal factors of a business that might result in affecting the performance of the business on strategic and financial grounds.

After presenting these analyses, a discussion based on the findings from the analysis has been presented, which provides the ratings for selected companies based on their financial performance and SWOT analysis. The insurance industry has been chosen for this project looking at the importance of this industry in terms of its contribution to the economy of the UK. The insurance industry has played a vital role in covering the customers from the risks of investment, health, education, etc. 

This industry has satisfied the customers in terms of their requirements for general insurance as well as life insurance. Due to the demand for these products in the market, the industry has registered a strong trend in sales and revenue earnings. According to Global Business Browser (2012), the value of the UK insurance market increased by 2.6% to $319.7 billion in 2011, which makes it the largest insurance market in Europe that accounts for 21.5% of the European insurance market value. There are a large number of service providers in this industry who are highly competitive and offer the scope of analysis of the operating situation and competitive environment in the insurance market.