Aon SWOT & PESTLE Analysis

Detailed PESTLE Analysis of Aon

Political

1. Impact of Brexit: The referendum of Britain to exit Eurpoean Union has created unexpected volatility among the businesses. Organizations will have to rework on their strategies which were earlier pan-European. Although, current signals suggest limited and cautious adaptation by the market, but Brexit may lead to series of other legislative acts in a wave of nationalism around the world and such a wave would constrain the growth and social mobility which the companies have been enjoying for the past few decades to grow.

Economic

1. Insurance Relevance to the Economy: Globally, the insurance premium has decreased over the decade and as of today it stands to being 2.0 percent of the GDP which was 2.2 percent a decade ago- The reason for this being the significant drop among the countries in Europe. However, countries like India, China and Latin America are some of the bright spots and show a growth. The chart below compares the property-casualty premium and GDP for the top 50 countries over the last 10 years.

2. Need for insurance in Emerging Economies: Emerging Economies like India which are undergoing the Economic transition there is tremendous potential for growth because there is need for insurance of health, property etc which is still at a very nascent stage. For example, around 40 million people in India suffer financial crises due to health issues. Aon can capitalize on this opportunity by creating products for these markets.

3. Reduction in interest rates leading to decline in premiums: The interest rates are decreasing continuously in some of the economies where Aon is operating leading to recution in interest oin the products that are offered which in turn has led to lower premium growth. Also, some of the major economies are experiencing slowdown which has resulted in lower growth for products other than life and health insurance.

Social

1. Social media influence on younger generations: In the age of internet-enabled world, The younger generations which have grown up in this age are highly influenced by Social media as it ensures that the cnsumers are aware about their own needs and the options available to them. It provides them a greater transparency in terms of pricing and also gives them the voice if they are not satisfied with the product or service standards which are set tremendously high by the new age technology service companies and the insurance companies are finding it very difficult to compete, which they have to change in order to compete and influence the new generation.

2.Rapid growth of Takaful: Takaful, an insurance form compliant with Islamic law is rapidly growing in the Asian and Middle East countries where the insurance has not played a very significant role till now. According to Ernst & Young, Global contributions of Takaful have been growing annually at 14 percent and are forecasted to reach USD 20 billion by 2019 and are expected to maintain strong growth, driven by the slamic banking sector strength and the government initiatives. This niche but growing segment deserves the industry attention.

3.Increase in income and rise of middle class: In countries like India and Mexico, there is growing population which is working as compared to dependant population and there is increase in disposable income in these countries giving rise to a new middle class population which is more aware and purchases insurance products more often to mitigate risks, resulting in an opportunity for companies like Aon. For instance the population of Mexico is close to 130 million but the insurance penetration is only 2.3% which presents a huge opportunity.

Technological

This section is available only in the Complete report on purchase.

Legal

This section is available only in the Complete report on purchase.

Environmental

This section is available only in the Complete report on purchase.