Assignment: Principle of Risk and Insurance
Case Study: Topics and Guidelines
Topics:
• Contract risk analysis - "Contracts may be complex but the dynamics that govern their creation are simple: one side wants the largest amount of revenue, the other the smallest expense. Whatever you're looking for, one lesson is vital: the value of contracts is realized only after they're signed".PwC
Identify the risks associated with a contractual agreement and determine ways to mitigate these risks.
Assessment Criteria:
o Identify the types of contract risks (e.g. Poor incentives, bad planning and demand management, deliberate contract manipulation or miscommunication and loss of intellectual property) - Provide examples of contractual failures.
o Control contract risk exposures (e.g. Understanding the contract in-depth, managing contract scope and counterparty expectations, controlling cost overruns, ensuring the contract meets the business needs)
• Mergers and acquisitions (private sector) - "Global mergers and acquisitions are expected to rise significantly through 2014, given the expected corporate profit increases in virtually every industry sector. The world's largest companies are bouncing back ..." ACE group.
Identify the major risks associated with M&A and provide examples of organizational failure in undertaking a merger or acquisition; highlighting the reasons for the failure.
Assessment Criteria:
o Identification the major risks in mergers and acquisitions (e.g. Lack of transparency, retention of core competencies and staff, change management and organizational culture clash, complexity and time-consumption, lack of due diligence, financing the transaction and overvaluation, lack of suitable preparation and analysis, and brand association)
o Providing a real life example of a major failure of a merger or acquisition associated with global firms and explaining the reasons for the failure. (e.g.Disney-Pixar, Exxon-Mobil, Daimler Benz/Chrysler, AOL/Time Warnerand IBM/Sun micro systems)
• Financial Risks-"Organizations face a wide variety of financial risks that could potentially pose a severe threat to their wellbeing and continuity. The recent financial crises has resulted in the collapse of many financial institutions due to their exposure to financial risks, mainly credit risk". E&Y
Explain the major financial risks related to the operations of a financial institution, and describe the threats these risks pose on the financial well-being of the institutions. Discuss the reasons for the occurrence of the financial crises and analyze the impact it had on the financial institutions that collapsed and the global economy.
Assessment Criteria:
o Explaining the major financial risks (e.g. credit, liquidity, interest rate, exchange rate, and commodity price risks)
o Discussing the reasons behind the financial crisis (e.g. subprime lending and the use of financial instruments such as credit swaps)
o Analyzing the impact of the crises on major financial institutions (e.g. Lehmann bros, Citi group or AIG) and on the global economy as a whole.
• Airport risk analysis (public sector) - "Large airports have operator services, border controls, plane runways, docks and ramps (maintenance and refueling); air traffic control, passenger facilities such as terminals, restaurants and lounges; baggage, catering and other logistical operations; and security and emergency services". British airport authorities.
Apply the risk management process in order to analyze the risks associated with airport safety, security and operations.
Assessment Criteria:
o Identify the risks associated with airport operations (e.g. public safety from fires and theft, smuggling and illegal contraband such as drugs and weapons, airplane maintenance issues, air traffic mismanagement, baggage loss, delays, airplane accidents and congestion)
o Measure and assess the impact of these risks and prioritize them (e.g. baggage loss would be low impact while plane accidents are extremely high impact)
o Airport internal controls (e.g. Security checks and cctv, time management, air traffic and logistical procedures and controls, maintenance, public evacuation procedures, passenger compensation polices and fire and first aid services)
• Health insurance in the GCC (Trend analysis)-"Medical insurance coverage in the GCC is likely to increase significantly over the next few years, especially considering that some GCC governments have mandated health insurance. This would significantly drive health insurance and, in turn, the overall healthcare market". Alpen Capital
Discuss the challenges faced by the health insurance sector in the GCC and describe the industry trends related to the growth of the health insurance sector in the GCC.Analyze the reasons for the growth.
Assessment Criteria:
o Discuss the current state of the health insurance market in the GCC (e.g. current market size, growth prospects and infrastructure)
o Highlight the challenges faced by the health insurance industry in the GCC (e.g. competition and overcrowding, inadequate regulation, volatile profit margins, shortage of statistics and expertise, lack of public embrace of insurance)
o Analyze the factors contributing to the growth of the health insurance sector in the GCC (e.g. Government mandates, increased public access and awareness, economic growth and sector funding, demographics and increase in international insurers and brokers)
• Insurance contracts - "An insurance policy is a legal contract between the insurance company (the insurer) and the person(s), business, or entity being insured (the insured). Reading the policy helps verify that the policy meets your needs and that you understand your and the insurance company's responsibilities if a loss occurs". The Canadian dept. of financial regulation
Develop an insurance contract that provides coverage for smartphones. Include all the relevant contract sections and provisions.
Assessment Criteria:
o Construct a presentable template for the insurance coverage of the smartphones and tablets. (e.g. sections, headings, logo, graphics and layout)
o Identify and include all relevant parts of an insurance contract and make them directly relevant to the insured products. (e.g. declarations, definitions, insuring agreement, exclusions, conditions, deductibles, endorsements and cancellations policy)
• Risk impact analysis-"When Deepwater Horizon, an oil drilling rig part-operated by BP, sank in the Gulf of Mexico following a powerful explosion and fire last year, spilling around 700,000 tons of oil and polluting the shores of Louisiana, Alabama, Florida and Mississippi, it was almost immediately dubbed an "oil Chernobyl." The accident immediately sparked debate on the future of global energy. Governments started reaching for previously shelved nuclear power generation programs. Less than one year on, an earthquake hit Japan's Fukushima nuclear power plant, putting the global energy sector at a crossroads yet again". CNN reporters
Describe and evaluate the impact of the BP Gulf of Mexico oil spill and the Fukushima nuclear power plant incidents on the company's involved, public health and safety, the environment and international energy policies and regulation.
Assessment Criteria:
o Assess the extent of the damages caused by the two incidents on the companies involved (e.g. recorded losses, share prices reduction, public image and reputation, environmental damage and damages to other sectors such as fisheries)
o Discuss the impact of these incidents on public health and safety, environment and the effect it had on the global energy policy (e.g. radioactive waste, damage to the ecosystems and the international government and public perception regarding energy sources and usage such as the reduction in the use of nuclear power in Germany and Japan)
• Construction risks and insurance requirements - "No construction project is risk free. Risk can be managed, minimized, shared, transferred, or accepted... It cannot be ignored." (Risk management - The commercial imperative), Michael Latham.
Identify the major construction risks and describe the ways these risks are managed. Furthermore, discuss what types of insurance coverage's are needed for a construction company.
Assessment Criteria:
o Identify the major risks associated with construction projects (e.g. project cost management and under budgeting, structure quality and design risks, raw material availability and price volatility, workforce and public health and safety, regulatory compliance and time management)
o Describe some types of controls that minimize the construction risk severity and frequency (e.g. project planning and budgeting, employee training programs, stress tests, commodity price hedging and site accessibility and security measures)
o Examine the types of insurance coverage that a construction company may obtain (e.g. health insurance, workers compensation, liability and property insurance)
• Professional liability- "When a malpractice claim is brought against a medical professional, the emphasis of the claim is placed not on the result of any care provided, but on the standard of care. Ultimately, a medical malpractice claimant would have to demonstrate that the standard of care provided was below that expected of a trained professional". Medical-protection.org
Compare two medical malpractice liability claims that had different outcomes; one where the claimant was compensated and one where the claim was denied. Examine the case details and explain why the insurer compensate the claimant in one of the cases and not the other.
Assessment Criteria:
o Discuss the two cases chosen in detail, providing a clear explanation regarding the outcomes. (e.g. What were the procedures, when and where they happened and what was their outcomes)
o Differentiate between the cases in terms of the eligibility and legitimacy of the claims. (e.g. what are the main reasons for the claim rejection or approval)
Format your assignment according to the following formatting requirements:
o The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
o The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
o Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.