The term itself is a word expressing endearment. Most likely Peter has never met the addressees of this letter. Yet in Christ they are beloved to him. He makes a point of voicing this term of endearment at this point because what he is going to say next is not easy to hear (and hence to say). It is not that Peter sets out to criticize his readers for some failings; rather, what he has to say runs contrary to what sinful flesh wants to hear.
11 Beloved, I urge you as sojourners and exiles to abstain from the passions of the flesh, which wage war against your soul.