Based on the above information, identify and justify the 10 risk exposures that should be reported as part of an ERM System for DYSO and associate DYSO’s possible insurance programme.

Assessment Instructions
This assessment is in 2 parts.
Case Scenario

Insurance intermediaries advise on strategies for managing risks and obviously specialise in risk transfer through insurance. Insurance brokers often provide a certain level of risk analysis, where a review of a business’s activities will indicate to the insurance broker the typical types of insurances that are relevant for the firm. The essential role of an insurance broker is to advise the client on the insurance options available to meet the client’s risks and to procure the selected insurance at a competitive price, commensurate with the cover being granted.

You are the risk advisor for White & Ball Ltd, an international insurance and risk broker, that has a contract with DYSO Ltd. DYSO is a large manufacturer of fridge-freezer components with its headquarters in London, UK. DYSO has businesses in several countries around the world. Currently, DYSO does not have an Enterprise Risk Management (ERM) framework in place. The management of risk has been dealt with by individual departments implementing their own solutions.

Another issue is the considerations with the rising costs of DYSO’s insurance premiums. Cost-effective insurance is not always readily obtainable. Many insurers like to sell standard insurance packages with covers and premiums they feel able to profit from. Departures from offered products to cover other risks may be discouraged by high premiums or exclusions. There have been many developments that have caused organisations to look elsewhere for their risk funding, however, the insurance market still provides a valuable risk funding mechanism. In this regard, DYSO needs an insurance programme that matches its risk and insurance requirements, risk appetite, and budgets with insurer capabilities and preferences by the insurance products offered on the market. DYSO has the following risk features:

• More than 2,000 employees.
• Buys and sells its products and raw materials worldwide, often transacting in the domestic currency of its customers and suppliers.
• Borrow heavily to finance its purchases.
• Hazardous processes

DYSO’s top level management has asked you to review the risks and the insurance programme,

Part 1: Group Report
Your tasks:

i) Design and explain an appropriate ERM framework considering the relevant risk management standards.

ii) Examine the potential costs and benefits that may be related with the implementation of your planned design (in Part i).

iii) Based on the above information, identify and justify the 10 risk exposures that should be reported as part of an ERM System for DYSO and associate DYSO’s possible insurance programme.

iv) For those risks that you identified in Part (iii) propose, with justification (construct risk register and probability/impact matrix), necessary risk treatment options (risk retention, insurance, etc.). For your choice of risk treatment options, you should refer to the cost of insurance premiums and benefits of insurance coverages as well. This may include awareness of alternative contexts and why they are not suitable for the case scenario in which your risk and insurance report will be based.
This is a group coursework.

 

Format: Case Study

A brief description of the expected content and layout: You may follow the content and layout as below:

Case study title
Table of contents
Address the key points highlited in the case study
Formation of a logical conclusion
Reference list

Part 2: Individual Reflection

The reflective report requires you to consider your contribution to the group’s performance and the skills you have developed and gained in the course of the assessment. You may include information on your difficulties and enjoyment, your strengths and weaknesses, what you have learned, and linkage on how these skills are transferrable to your future role and your future behaviours.

You must ensure that you back up your statements with facts and figures. The word limit for the individual reflection is 500 words;the word count should be indicated at the end of the summary, which should be attached to the end of the report.

Learning outcomes:

Contextualise understanding of risk management principles in non life insurance business

Evaluate different approaches and perspectives on risk management in non life insurance

Apply risk management theory in complex scenarios

Analyse insurance risk management decisions in practice

Recommend effective strategies to manage risk in non life insurance contexts

Demonstrate skills in teamwork, written and oral communication

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