Third Point Reinsurance: Business Model, SWOT Analysis, and Competitors 2024

Third Point Reinsurance, a globally recognized reinsurance company, leverages a unique business model that combines traditional reinsurance with alternative investment strategies. This blend aims to optimize returns and manage risks effectively. In this article, we delve into an in-depth SWOT analysis, exploring Third Point Reinsurance's strengths, weaknesses, opportunities, and threats. Additionally, we examine the competitive landscape for 2024, highlighting key industry players and emerging trends that could impact the company's strategic positioning.

### What You Will Learn

• Ownership and Mission: Discover who owns Third Point Reinsurance and understand the company's mission statement.
• Business Operations and Competitors: Learn how Third Point Reinsurance generates revenue, explore its business model canvas, and identify its key competitors.
• Strategic Insights: Gain insights from a comprehensive SWOT analysis to understand the strengths, weaknesses, opportunities, and threats faced by Third Point Reinsurance.

Who owns Third Point Reinsurance?

Who Owns Third Point Reinsurance?

Third Point Reinsurance Ltd. was established by Third Point LLC, a New York-based hedge fund founded by renowned investor Daniel S. Loeb. The hedge fund, established in 1995, is known for its activist investment approach and has a reputation for taking significant positions in companies to influence their strategies and operations.

Initially, Third Point Reinsurance was launched to leverage the analytical expertise of Third Point LLC in the insurance and reinsurance industries. By combining the hedge fund's investment prowess with reinsurance operations, Third Point Re aimed to generate superior returns for its stakeholders.

Third Point Reinsurance is publicly traded, which means its ownership is distributed among various institutional and retail investors who hold its shares. Major institutional investors often include mutual funds, pension funds, and other investment firms that have confidence in the company's long-term growth and profitability.

In addition to institutional and retail investors, the company's management team and board of directors may also own shares, aligning their interests with those of the shareholders. This ownership structure is typical of publicly traded companies and ensures that the management is motivated to enhance shareholder value.

In a strategic move to expand and diversify its operations, Third Point Reinsurance announced a merger with Sirius International Insurance Group in August 2020. This merger led to the formation of SiriusPoint Ltd., a global insurer and reinsurer that combines the strengths of both entities. Post-merger, the ownership and operational structure evolved, with Daniel S. Loeb continuing to play a significant role through his investment firm, Third Point LLC.

The merger aimed to create a more robust and diversified company capable of competing more effectively in the global insurance and reinsurance markets. It also provided shareholders of both companies with enhanced growth opportunities and a stronger balance sheet.

In summary, Third Point Reinsurance, now part of SiriusPoint Ltd., is primarily owned by a mix of institutional and retail investors, with significant influence and ownership retained by its founder, Daniel S. Loeb, through Third Point LLC. The company's evolution through strategic mergers reflects its adaptive approach to growth and value creation in the competitive reinsurance industry.

What is the mission statement of Third Point Reinsurance?

What is the mission statement of Third Point Reinsurance?

Third Point Reinsurance, a dynamic and innovative player in the reinsurance industry, is driven by a clear and compelling mission statement. The mission of Third Point Reinsurance is to deliver superior risk-adjusted returns to their shareholders by combining disciplined underwriting with a unique, alternative investment strategy. At its core, the company focuses on providing bespoke reinsurance solutions that meet the diverse needs of their clients while leveraging the investment acumen of their affiliated asset management firm, Third Point LLC.

The mission statement underscores several key components:

1. Superior Risk-Adjusted Returns: Third Point Reinsurance aims to outperform traditional reinsurance companies by carefully balancing risk and return. The emphasis on risk-adjusted returns highlights the company's commitment to not only generating profits but doing so in a way that carefully considers the potential risks involved.

2. Disciplined Underwriting: The company prides itself on its rigorous underwriting standards. By meticulously evaluating and selecting risks, Third Point Reinsurance ensures that it maintains a robust and profitable portfolio. This discipline is essential in an industry where the cost of misjudging risk can be exceptionally high.

3. Alternative Investment Strategy: Unlike many traditional reinsurers, Third Point Reinsurance integrates an alternative investment approach. By partnering with Third Point LLC, a renowned hedge fund led by Daniel S. Loeb, the company can tap into unique investment opportunities that offer higher returns than conventional reinsurance investment portfolios.

4. Client-Centric Solutions: The mission statement also highlights the importance of client satisfaction. Third Point Reinsurance is dedicated to providing tailored reinsurance solutions that address the specific needs and challenges of their clients. This customer-focused approach helps build long-term relationships and trust within the industry.

In summary, Third Point Reinsurance's mission statement reflects a commitment to excellence in underwriting, innovative investment strategies, and delivering value to both shareholders and clients. This mission drives the company's strategic decisions and operational practices, positioning it as a forward-thinking leader in the reinsurance sector.

How does Third Point Reinsurance make money?

How does Third Point Reinsurance make money?

Third Point Reinsurance, like other reinsurance companies, generates revenue primarily through two main activities: underwriting reinsurance policies and investing the premiums they receive.

Underwriting Reinsurance Policies

At its core, Third Point Reinsurance operates by providing reinsurance coverage to primary insurance companies. Reinsurance is essentially insurance for insurance companies, where the reinsurer agrees to take on some of the risks associated with the policies issued by the primary insurer. This transfer of risk helps insurance companies manage their exposure to large claims and stabilize their financial outcomes.

1. Premiums: Third Point Reinsurance collects premiums from primary insurers in exchange for providing reinsurance coverage. These premiums are the primary source of revenue. The company assesses the risks associated with the policies they underwrite and sets premium rates accordingly. The goal is to collect more in premiums than they pay out in claims, thereby generating underwriting profit.

2. Risk Management: Effective risk management is crucial for profitability. Third Point Reinsurance employs sophisticated models and actuarial analyses to assess the risk of various policies. By carefully selecting and diversifying the risks they underwrite, they aim to minimize the likelihood of large, unexpected losses.

Investment Income

In addition to underwriting profits, Third Point Reinsurance also aims to generate income through the investment of the premiums they collect. Unlike traditional insurers, Third Point Reinsurance has a unique approach to investing.

1. Third Point LLC Partnership: A significant portion of the company's investment strategy involves a partnership with Third Point LLC, a hedge fund founded by renowned investor Daniel Loeb. The hedge fund is known for its activist investment approach, seeking to generate high returns through a combination of long and short positions in various asset classes, including equities, credit, and other financial instruments.

2. Investment Returns: By leveraging the expertise of Third Point LLC, Third Point Reinsurance aims to achieve higher investment returns than what might be obtained through more traditional, conservative investment strategies. These investment returns can significantly boost the company's overall profitability.

3. Diversification: The company also diversifies its investment portfolio to manage risk and capture opportunities across different market conditions. This diversification helps to ensure that the company can generate stable investment income, even in volatile market environments.

Combined Profitability

The profitability of Third Point Reinsurance is thus a combination of underwriting profits and investment income. By effectively managing risk and leveraging the investment acumen of Third Point LLC, the company aims to deliver strong financial performance over the long term.

In summary, Third Point Reinsurance makes money by carefully underwriting reinsurance policies to collect premiums and by strategically investing those premiums to generate additional income. Their unique investment partnership with Third Point LLC sets them apart from many traditional reinsurers and provides an additional avenue for enhancing returns.

Third Point Reinsurance Business Model Canvas Explained

Third Point Reinsurance Business Model Canvas Explained

Key Partners

Third Point Reinsurance collaborates with various key partners essential to its business operations. These include reinsurance brokers, investment managers, and financial institutions. The company has a significant relationship with Third Point LLC, a hedge fund that manages the investment portfolio for Third Point Reinsurance, leveraging sophisticated investment strategies to enhance returns.

Key Activities

The core activities of Third Point Reinsurance revolve around underwriting reinsurance contracts and managing the associated risks. Additionally, investment management is a critical activity, given the company's unique business model of integrating reinsurance with hedge fund investment strategies. This involves constant market analysis, portfolio adjustments, and risk management to optimize investment returns.

Key Resources

The primary resources for Third Point Reinsurance include its experienced underwriting team, robust actuarial capabilities, and strong financial backing. The investment acumen provided by Third Point LLC is also a crucial resource. Additionally, the company's technology infrastructure that supports underwriting and investment operations is vital.

Value Propositions

Third Point Reinsurance offers a unique value proposition by combining traditional reinsurance with active investment management. This hybrid model aims to provide superior returns compared to conventional reinsurance companies. The company also emphasizes tailored reinsurance solutions, addressing specific client needs with flexibility and expertise.

Customer Relationships

Building and maintaining strong relationships with clients is a cornerstone of Third Point Reinsurance's business model. This involves regular communication, personalized service, and a deep understanding of client needs. The company also places a strong emphasis on transparency and trust, ensuring clients are well-informed about both underwriting and investment performance.

Channels

Third Point Reinsurance reaches its clients primarily through direct relationships and reinsurance brokers. The company participates in industry conferences, publishes thought leadership content, and leverages digital platforms to enhance its visibility and credibility in the market.

Customer Segments

The company's primary customers are insurance companies seeking reinsurance solutions to manage their risk exposure. This includes property and casualty insurers, life and health insurers, and specialty insurers. Third Point Reinsurance also caters to other reinsurance companies looking for retrocession coverage.

Cost Structure

Major costs for Third Point Reinsurance include claims payments, operational expenses, and management fees paid to Third Point LLC for investment services. Additional costs include technology investments, compliance and regulatory costs, and personnel expenses.

Revenue Streams

The primary revenue streams for Third Point Reinsurance are premiums earned from underwriting reinsurance contracts and investment income generated from the managed investment portfolio. The company also benefits from fee income related to specific reinsurance and investment services provided to clients.

By leveraging a unique blend of reinsurance and investment expertise, Third Point Reinsurance aims to deliver enhanced value to its clients and stakeholders, positioning itself as a differentiated player in the reinsurance market.

Which companies are the competitors of Third Point Reinsurance?

Which Companies Are the Competitors of Third Point Reinsurance?

Third Point Reinsurance, a prominent player in the reinsurance industry, faces competition from several other companies that offer similar services. These competitors range from well-established giants to emerging firms, each vying for a share of the market. Below, we explore some of the key competitors of Third Point Reinsurance:

1. RenaissanceRe Holdings Ltd.

RenaissanceRe is a global provider of reinsurance and insurance, specializing in property, casualty, and specialty reinsurance. With a strong track record of profitability and innovation, RenaissanceRe is a formidable competitor. The company is known for its underwriting expertise and robust risk management practices, which enable it to offer competitive pricing and comprehensive coverage options.

2. Arch Capital Group Ltd.

Arch Capital offers a wide array of reinsurance and insurance products, including property, casualty, and specialty lines. With a strong global presence and a diversified portfolio, Arch Capital competes directly with Third Point Reinsurance in several market segments. The company's analytical approach to risk and strong financial position make it a significant competitor.

3. Everest Re Group, Ltd.

Everest Re is a leading global reinsurance and insurance organization. Known for its financial strength and stability, Everest Re provides a broad range of reinsurance products, including property, casualty, and specialty lines. The company's extensive experience and strategic market positioning allow it to compete effectively with Third Point Reinsurance.

4. PartnerRe Ltd.

PartnerRe offers reinsurance solutions across a wide range of lines, including property, casualty, motor, and health. The company is renowned for its client-focused approach and innovative solutions, making it a strong competitor in the reinsurance space. PartnerRe's global reach and specialized expertise allow it to cater to a diverse client base, often overlapping with Third Point Reinsurance's target market.

5. AXIS Capital Holdings Limited

AXIS Capital provides a variety of insurance and reinsurance products, including property, casualty, and specialty lines. The company's commitment to innovation and customer service, coupled with its strong financial foundation, positions it as a key competitor. AXIS Capital's strategic initiatives and market acumen enable it to challenge Third Point Reinsurance in various segments.

6. Validus Holdings, Ltd.

Validus Holdings, part of the AIG family, offers reinsurance and insurance solutions globally. Known for its deep expertise in property and marine reinsurance, Validus competes directly with Third Point Reinsurance in these areas. The company's integration with AIG has bolstered its capabilities and market presence, enhancing its competitive edge.

Conclusion

The reinsurance industry is highly competitive, with numerous companies striving to offer the best solutions to their clients. Third Point Reinsurance faces competition from established leaders like RenaissanceRe, Arch Capital, Everest Re, PartnerRe, AXIS Capital, and Validus Holdings. Each of these competitors brings unique strengths and capabilities to the market, making the reinsurance landscape dynamic and challenging. To maintain its competitive position, Third Point Reinsurance must continue to innovate, manage risks effectively, and deliver superior value to its clients.

Third Point Reinsurance SWOT Analysis

Third Point Reinsurance SWOT Analysis

Strengths

1. Strong Financial Backing: Third Point Reinsurance benefits from the robust financial support of its parent company, Third Point LLC, a well-established hedge fund. This backing provides a solid financial foundation and enhances the company's credibility in the reinsurance market.

2. Experienced Management Team: The company boasts a highly experienced management team with extensive expertise in both reinsurance and investment management. This combination of skills allows for strategic decision-making and effective risk management.

3. Innovative Investment Strategies: Leveraging the investment acumen of Third Point LLC, the reinsurer employs innovative investment strategies that aim to maximize returns. This approach sets the company apart from traditional reinsurers who may rely solely on underwriting profits.

4. Diversified Portfolio: Third Point Reinsurance maintains a diversified portfolio across different lines of business and geographical regions. This diversification helps in mitigating risks and achieving stable financial performance.

Weaknesses

1. Dependence on Investment Income: A significant portion of the company's profitability is derived from investment income, which can be volatile. Market fluctuations can impact overall financial performance, making the company more susceptible to economic downturns.

2. Limited Market Share: Compared to some of its larger competitors, Third Point Reinsurance has a relatively smaller market share. This limitation can impact its bargaining power and ability to attract high-profile clients.

3. Exposure to Catastrophic Events: As with any reinsurance company, Third Point Reinsurance is exposed to catastrophic events such as natural disasters. These events can lead to substantial claims and impact the company's financial health.

Opportunities

1. Expansion into Emerging Markets: There is significant growth potential in emerging markets where insurance penetration is relatively low. By expanding its presence in these markets, Third Point Reinsurance can tap into new revenue streams.

2. Technological Advancements: Embracing new technologies like artificial intelligence and data analytics can enhance underwriting processes, improve risk assessment, and increase operational efficiencies. This can provide a competitive edge in the reinsurance industry.

3. Strategic Partnerships and Acquisitions: Forming strategic partnerships or acquiring smaller reinsurance firms can help Third Point Reinsurance expand its market reach and diversify its portfolio further. This can also provide access to new expertise and resources.

Threats

1. Regulatory Changes: The reinsurance industry is subject to stringent regulatory requirements that can change over time. New regulations or changes in existing ones can increase compliance costs and operational complexities.

2. Intense Competition: The reinsurance market is highly competitive, with numerous players vying for market share. Increased competition can lead to pricing pressures and reduced profit margins.

3. Economic Instability: Global economic instability can impact the financial markets and, consequently, the investment income of Third Point Reinsurance. Economic downturns can also lead to an increase in claims, affecting profitability.

By conducting a thorough SWOT analysis, Third Point Reinsurance can better understand its current position in the market and strategically plan for future growth and stability.

### Key Takeaways

• Ownership: Third Point Reinsurance is owned by Third Point LLC, a New York-based hedge fund founded by Daniel S. Loeb.
• Mission Statement: The company's mission is to deliver superior risk-adjusted returns to shareholders by combining disciplined underwriting with a distinctive investment strategy managed by Third Point LLC.
• Revenue Model: Third Point Reinsurance generates revenue through a combination of underwriting premiums and investment income, leveraging the hedge fund's expertise in alternative asset management.
• Business Model Canvas: The Business Model Canvas of Third Point Reinsurance highlights critical aspects such as key activities (underwriting and investment management), value propositions (risk-adjusted returns), customer segments (insurance companies, policyholders), and key partnerships (Third Point LLC).
• Competitive Landscape: Key competitors include RenaissanceRe Holdings Ltd., Arch Capital Group Ltd., and Axis Capital Holdings Limited, among others in the reinsurance market. The SWOT analysis reveals strengths in investment expertise but also challenges from market volatility and competition.

Conclusion

In conclusion, Third Point Reinsurance stands as a notable player in the reinsurance industry, backed by its ownership and strategic affiliation with Third Point LLC, a leading investment management firm. This connection not only strengthens its financial footing but also aligns with its mission statement of delivering superior risk-adjusted returns by leveraging an innovative approach to reinsurance and investment strategies.

The company's revenue model primarily hinges on underwriting reinsurance contracts and strategically investing the premiums collected, thereby creating a dual stream of income that balances risk and reward. Through our in-depth exploration of Third Point Reinsurance's Business Model Canvas, we've unveiled how each component—from key activities and resources to customer segments and revenue streams—interlocks to drive its business forward.

In a competitive landscape, Third Point Reinsurance faces off against industry giants like Swiss Re, Munich Re, and RenaissanceRe, each vying for market share and operational excellence. However, the company's unique investment-driven business model offers a distinctive edge that sets it apart in the marketplace.

A detailed SWOT analysis reveals that while Third Point Reinsurance enjoys strengths such as financial robustness and innovative strategies, it must navigate challenges like market volatility and regulatory changes. Opportunities abound in emerging markets and technological advancements, although threats from intense competition and economic downturns remain.

Ultimately, Third Point Reinsurance's strategic vision, robust business model, and adaptive strategies position it well for navigating the complexities of the reinsurance industry, ensuring its continued growth and resilience amidst evolving market dynamics.

FAQs

What are the 5 elements of SWOT analysis?

SWOT analysis is a strategic planning tool used to identify and analyze the internal and external factors that can affect the success of a project, organization, or business venture. The acronym SWOT stands for:

1. Strengths: Internal attributes and resources that support a successful outcome. Examples include strong brand reputation, skilled workforce, proprietary technology, and financial resources.

2. Weaknesses: Internal factors that could hinder or limit success. These might include lack of resources, poor location, limited product line, or weak brand recognition.

3. Opportunities: External factors that the organization could exploit to its advantage. This could involve market growth, economic conditions, technological advancements, or changes in regulatory environments.

4. Threats: External challenges that could cause trouble for the business. Examples include market competition, economic downturns, regulatory changes, and shifts in consumer preferences.

Although sometimes people refer to a "fifth element" when discussing SWOT analysis, traditionally, SWOT includes just these four elements. However, some extended frameworks or methodologies build upon SWOT by adding other elements, such as:

1. Trends: Sometimes considered in extended SWOT analysis models, trends refer to the patterns or shifts in the market or industry that could impact the organization in both positive and negative ways. Analyzing trends helps in understanding the dynamic factors that could influence the SWOT elements over time.

In summary, the core elements of SWOT analysis are Strengths, Weaknesses, Opportunities, and Threats, with trends occasionally being considered for a more dynamic and forward-looking analysis.

What is the SWOT analysis of a policy?

A SWOT analysis is a strategic planning tool used to identify and assess the Strengths, Weaknesses, Opportunities, and Threats related to a particular subject. When applied to a policy, a SWOT analysis can provide a comprehensive overview of the policy's potential impact and effectiveness. Here’s how a SWOT analysis can be structured for a policy:

Strengths

Strengths are the internal attributes and resources that support a successful outcome of the policy.

• Clear Objectives: The policy has well-defined goals and objectives that are achievable and measurable.
• Stakeholder Support: The policy is backed by key stakeholders, including policymakers, industry leaders, and the public.
• Resource Availability: Adequate resources (financial, human, and technological) are allocated for the implementation of the policy.
• Evidence-Based: The policy is grounded in robust research and data, ensuring that it is effective and relevant.
• Legal Framework: The policy has a solid legal basis, ensuring compliance and enforcement.

Weaknesses

Weaknesses are internal factors that could hinder the successful implementation of the policy.

• Ambiguity: The policy may have vague or unclear provisions that can lead to misinterpretation and inconsistent application.
• Limited Resources: Insufficient funding, staffing, or technological resources may impede the policy's implementation.
• Lack of Stakeholder Engagement: Limited input from key stakeholders during the policy formulation phase can result in resistance and lack of buy-in.
• Implementation Challenges: There may be logistical or administrative hurdles that complicate the execution of the policy.
• Monitoring and Evaluation: Inadequate systems for monitoring and evaluating the policy’s impact can make it difficult to measure success and make necessary adjustments.

Opportunities

Opportunities are external factors that the policy can leverage to achieve its goals.

• Political Support: Favorable political climate and support from government officials can facilitate the policy’s adoption and implementation.
• Technological Advancements: Emerging technologies can enhance the effectiveness of the policy, such as data analytics for better decision-making.
• Public Awareness: Increasing public awareness and support for the policy can drive compliance and advocacy.
• Partnerships: Collaborating with other organizations, including NGOs, private sector, and international bodies, can provide additional resources and expertise.
• Legislative Changes: New or upcoming legislation can create a conducive environment for the policy’s success.

Threats

Threats are external factors that could undermine the policy’s effectiveness.

• Political Instability: Changes in government or political priorities can lead to the policy being deprioritized or repealed.
• Economic Downturns: Economic challenges may result in reduced funding and resources for policy implementation.
• Public Opposition: Resistance from the public or special interest groups can hinder the policy’s acceptance and compliance.
• Competing Policies: Other policies or regulations may conflict with or overshadow the policy in question.
• Global Events: Unforeseen global events, such as pandemics or geopolitical conflicts, can disrupt the policy’s implementation and effectiveness.

By conducting a SWOT analysis, policymakers can gain valuable insights into the potential strengths and weaknesses of a policy, as well as identify opportunities and threats that could impact its success. This analysis can inform the development, implementation, and adjustment of the policy to enhance its effectiveness and sustainability.

What are the key points of SWOT analysis?

SWOT analysis is a strategic planning tool used to identify and evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or business venture. Here are the key points of each component:

Strengths:

• Internal Factors: These are attributes of the organization that are helpful to achieving the objective.
• Competitive Advantages: Unique resources, capabilities, or technologies.
• Market Position: Strong brand reputation, customer loyalty.
• Financial Resources: Strong balance sheet, cash flow, and profitability.
• Operational Efficiency: Superior processes, skilled workforce, strong supplier relationships.

Weaknesses:

• Internal Factors: Attributes of the organization that are harmful to achieving the objective.
• Resource Limitations: Lack of key resources, limited R&D capabilities.
• Operational Inefficiencies: Outdated technology, high production costs.
• Market Perception: Weak brand reputation, low customer satisfaction.
• Financial Constraints: High debt levels, poor cash flow management.

Opportunities:

• External Factors: Conditions that could be exploited to advantage the organization.
• Market Growth: Emerging markets, growing customer base.
• Technological Advancements: Innovations that can improve processes or products.
• Regulatory Changes: Deregulation or favorable government policies.
• Strategic Alliances: Potential partnerships, mergers, or acquisitions.

Threats:

• External Factors: Conditions that could cause trouble for the organization.
• Competitive Pressure: New entrants, existing competitors, substitute products.
• Market Fluctuations: Economic downturn, changing customer preferences.
• Regulatory Challenges: New regulations, compliance costs.
• Technological Changes: Rapid technology changes that may render current products obsolete.

Application of SWOT Analysis:

• Strategic Planning: Helps in formulating strategies to leverage strengths and opportunities, while addressing weaknesses and protecting against threats.
• Decision Making: Assists in making informed decisions by providing a comprehensive overview of internal and external factors.
• Resource Allocation: Guides effective allocation of resources to areas with the highest potential for success.
• Risk Management: Identifies potential risks and enables proactive measures to mitigate threats.

Best Practices:

• Honest Assessment: Ensure an unbiased and realistic evaluation of strengths and weaknesses.
• Regular Updates: SWOT analysis should be revisited periodically to reflect changes in the internal and external environment.
• Involvement of Key Stakeholders: Engage various departments and stakeholders for a comprehensive perspective.
• Actionable Insights: Translate the findings of the SWOT analysis into actionable strategies and plans.

In summary, SWOT analysis is a versatile tool that provides a structured approach to understanding an organization's internal capabilities and external possibilities, enabling better strategic planning and decision-making.

How many points should be in a SWOT analysis?

A SWOT analysis typically includes four main categories:

1. Strengths: Internal attributes and resources that support a successful outcome.
2. Weaknesses: Internal attributes and resources that work against a successful outcome.
3. Opportunities: External factors the entity can capitalize on or use to its advantage.
4. Threats: External factors that could jeopardize the entity's success.

There is no strict rule about the number of points you should include in each category. However, it's generally advisable to aim for a balanced and comprehensive analysis. Here are some guidelines:

• Strengths: 3-5 key strengths
• Weaknesses: 3-5 key weaknesses
• Opportunities: 3-5 key opportunities
• Threats: 3-5 key threats

The exact number can vary depending on the complexity of the situation and the depth of analysis required. The goal is to provide a clear and actionable understanding of the internal and external factors that can impact the entity being analyzed.