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Question: Discuss about the Risk Management in Insurance Sector. Answer: Introduction Insurance sector has been increasingly immersed in a permanent updating process that fosters the changes required for adapting in both the new economic environments as well as growing level of safety (Titman, Keown and Martin 2015). In this particular case, general insurer had recently expanded after implementing acquisition as well as organic growth. For attainment of proper strategic planning process, Board need proper management of business interruption risks that will make an effective strategic planning process for the insurance companies. This is essential as Board showed concern regarding lack of effective management because of business interruption risks exposing the insurer regarding increased reputational risk (Sadgrove 2016). This present segment will explain the contribution whereby management of business interruption risks can be effective for proper strategic planning process. After reviewing the current strategy, Board decided working upon the inadequate business conti nuity as well as crisis management planning. Insurance companies have been active after utilizing wide-variety of exchange traded activities. Global demographic changes as well as calamities forced several domestic and international insurance companies for focusing products (Prez?Gonzlez and Yun 2013). This aims at improving the asset and liability management in along with financial risk managerial process as well as systems. Therefore, Insurance company risk managers as well as financial professionals focus mainly on insurance sector learning the sector. It is where insurance companies that identifies, measures as well as monitoring and controlling financial risks (Meyer, Normative and Kunreuther 2016). Explaining the contribution that the management of business interruption risks makes for an effective strategic planning process Business Interruption Risk in Insurance termed as form of Insurance Coverage replacing business income lost because of an event. This majorly interrupts the operational aspects of a business like fire or in case natural disaster (McNeil, Frey and Embrechts 2015). Therefore, Business Interruption insurance is not sold under any separate policy but rather added to the property or casualty policy mainly involved in the comprehensive package policy Business Interruption Insurance Premiums is deducted from ordinary business expenses. This policy type pays out cause of business income loss as covered from underlying property or casualty policies (Malhotra 2015). The amount payable based upon the past financial records of the business. This business interruption risk should be minimized by conducting a proper strategic planning process within the insurance company by the insurer. When it comes for effective decision-making activities, it is essential for keeping account of the legal requirements whereby insurance companies believes in satisfying the following factors as listed below: One of the factors that need to be considered in a proper strategic planning process is ensuring commitment of one of the insurance company Senior Managers (Lucey, Agnello and Laney 2015). In other words, having a project sponsor dedicates sufficient influence for ensuring the backing of all the solved activities. The other factor that needs proper attention is developing the scope of the project after identifying the areas of insurance companies for viewing at the physical locations (Lam 2014). Resource allocation is the factor involving human resources gaining help from project development or financial resources for elaborating activities (Kwon 2015). Other factor involves Business Continuity for smooth process for insurance companies (Hull 2012). Proper Strategic Planning Process will enable various insurance companies for reacting and returning to normal disaster-related business interruption (Hopkin 2014). In a particular insurance company, Strategic Planning Process involves various phases such as: Analyzing the risks from the event of unavailability- Proper Strategic Planning Process in an insurance company consider the elements such as people, technology, suppliers as well as building or infrastructure and information (Gold 2012). This risk of unavailability analyzes on the probabilities for assigning each threats. In other words, this enable the company for ascertaining the additional measures for taking reduced consequences for given case. This will act as a decision tool for prioritizing some of the recovery strategies. There are some of the difficulties associated with the current phase for encountering the risk analysis involving having a log of incidents affecting the insurance companies as well as accessing the necessary information at the same time (Goda 2015). Business Impact Assessment- Proper Strategic Planning Process will analyze the effect of not performing in a set of business continuity process after listing as well as sorting critical recovery-post disaster (Glendon, Clarke and McKenna 2016). This particular step considers as an important step as it defines Business Continuity Plan based on the outcome. Performing Tests- Proper Strategic Planning Process means determining way for facing the disaster after exercising the performance (Embrechts and Hofert 2014). This action plan will enable staff members for verifying the solutions for implementing the procedures as developed for meeting the business requirements of the insurance companies. Further, it will identify aspects for reviewing purpose. Tests can even be performed in various stages as dependent on gaining understanding of matured solutions or implementation procedures at the same time (Eilers and Lawrence 2015). Selection and designing the solutions for recovering the activity- Proper Strategic Planning Process will be analyzed for performing the process for minimizing the recovery time (Dorfman and Cather 2012). These solutions can be well defined after defining the unavailability scenarios of elements for performing the process. Study of the dependence process- Proper Strategic Planning Process enables aspect for possible dependency between processes Business Interruption Risk Assessment used for insurance planning as well as prevention. In other words, this risk assessment help in providing information on business interruption as occurred from the event of a catastrophe (Dionne 2013). In contrast to risk, it majorly deals with technical as well as structural aspects focusing widely on economic damage. Focus is on catastrophic events as opposed by business continuity management for identifying as well as quantifying the documents especially in case of emergency and crisis management purposes (Cummins and Santomero 2012). Business Interruption assessment recommended when a particular business organization takes out plans for renewing the business interruption insurance policy. In other words, this assessment is helpful by reviewing the existing insurance cover (Cole, Gin and Vickery 2013). Therefore, Business Interruption assessment is considered invaluable from contracting a new plant or an existing one at the same time. It is important to consider the fact regarding the companies with interruption risk assessment (Cole et al. 2013). This should conduct workshop with the company management for analyzing the worst-case scenarios as well as developing strategies for ensuring business in getting back to normal phase. This will mainly involve cost calculation after proper examination of level of affordability part. Therefore, insurer should render general information for selecting the most appropriate insurance policy or in case renewing the business interruption insurance. This in other way takes into consideration economic analysis at the catastrophe situation. Henceforth, it requires outlining the measures at the given event of catastrophe and making management aware regarding any preventative measures (Born et al. 2014). Analyzing the risks for the Insurer of inadequate business continuity and crisis management planning Unplanned events have a devastating effect by the insurer on the insurance companies. Some of the crisis includes fire, damage to stock as well as Key staff members suffering from illness. This crisis makes it difficult for carrying out normal day-to-day activities (Blaunstein, Trump and Linkov 2014). This can even give rise to losing of important customers as well as going out of business altogether. In order to minimize inadequate business continuity and crisis management planning, it is essential to conduct good planning by taking proper steps at first place (Bennett et al. 2014). This present segment will take into consideration identifying potential risks as well as preparing for emergencies for testing the business for coping up with the disaster Accidents happen so it is important to consider the fact that business profits as well as company reputation is at risk (Baxter et al. 2013). Shareholders on the other hand depend upon the company livelihood gaining reassurance for minimizing major incidents or occurrence of crisis. Most of the insurance companies make forward-looking statements from the Annual report and accounts. This describes the principal risks as well as uncertainties faced by insurance companies. These are some of the statements involving mitigating ways affecting the risks. The present segment indicates good design as well as management of facilities backing up with proper Business Continuity Plan. Insurance can be noticed as a supplementary mitigated risk for line of defense (Akotey and Abor 2013). On the contrary, combining an effective risk management strategy aligning with suitable Business Continuity Planning The core factor of Business Continuity Planning aims at rendering appropriate level of details for anticipated users. It comes under user-friendly as well as familiar format (Meyer, Normative and Kunreuther 2016).. This act as an adequate means for maintaining business as well as company reputation Need to Plan for Possible Crisis It is important for planning continuously in way of protecting the impact of potential crisis like fire, theft to IT system failure and flood. This is restricted for accessing to premises or staff members suffering from illness. Planning plays an important role for insurance companies that lack resources for coping up at the time of crisis. Plan failure can be a disastrous attribute that need proper attention as far as possible. One of the practical way for catering various needs are divided into Business Continuity Planning in given ways. Risk Management in Insurance offers another form of protection. This is another possibility of loss. Sharing risk among small group of community members act as a mutual aid groups (Meyer, Normative and Kunreuther 2016). During worst times, business can never recover and lead towards cease trading. Planning Process should involve attributes such as: Identifying the potential crisis Determination of attributes used for minimizing the risks from these disasters Setting out activities occurred from business continuity plan Testing the plan on regular basis Benefits of using continuity plan will make sure of coping with the crisis and find ways for minimizing the disruption to the business as well as customers. In other words, this will prove to customers, investors as well as insurers whereby business is robust enough for coping with any crisis and remaining edge by the competitors (Titman, Keown and Martin 2015). Crisis affecting business Depending upon the business specific circumstances, there are wide-variety of possible events constituting the crisis. This crisis includes: Natural Disaster- This particular crisis involves flooding caused by burst water pipes especially on heavy rain or wind damage (Meyer, Normative and Kunreuther 2016). Theft or vandalism- This means theft for computer environment likes proving to be devastating effect. Fire- There are few other situations affecting potential by physically destroying the business (Titman, Keown and Martin 2015) Power Cut- This involves loss of power possessing serious consequences (Blaunstein, Trump and Linkov 2014). IT System Failure- This involves computer viruses, hackers attacks affecting employees possessing ability to work in an effective way. Terrorist attack- This considers one of the risks to the employees in the business operations at the time of terrorist strike. Assessing the possible impact of risks affecting the insurer It is essential to analyze the probability as well as consequences of crisis affecting the insurance business. It takes into consideration assessing the likelihood for a particular crisis concerning possible frequency. This aims at determining the possible impact affecting the operational aspects for the insurance companies (Titman, Keown and Martin 2015). On the contrary, this analysis will help in identifying the business functions for day-to-day running of the business activities in insurance sector. This concludes from given certain roles as well as responsibilities in and across the insurance sector in worst disaster scenario (Blaunstein, Trump and Linkov 2014). Likelihood of risk occurs by grading the probability of a particular crisis presented on a numerical scale. This will majorly help in deciding upon the attitude of the business towards risk assessment activities. It is required for deciding on various low-probability crises possessing damage to the business such as terrorist attack (Meyer, Normative and Kunreuther 2016). Rapid Globalization has increased the connection with potential risk factor. In other words, events occurring in one industry or country give rise to rapid transmission to other industries in and across the globe (Blaunstein, Trump and Linkov 2014). A Pragmatic Solution Business Continuity Plan will take into account factors containing employed competent people for understanding the business. This will have empirical knowledge for various potential crises especially from risk assessments (McNeil, Frey and Embrechts 2015). This particular plan will take into account for factors for preparing as well as guiding a comprehensive on timely manner. Business Continuity Planning needs to be maintained as well as kept up-to-date information. Effectiveness of Business Continuity Planning must be verified by exercising at corporate as well as local level (Meyer, Normative and Kunreuther 2016). Therefore, learning from these tests after allowing continual improvement in providing greater reassurance in maintaining the continuity in the most appropriate way Recommendations The management of the company can make use of an approach that can ensure implementation of the assimilated risk management procedure that is in congruence with the strategic planning process (McNeil, Frey and Embrechts 2015). The management of association between the business interruption risk as well as strategic planning risk can help in integration of risk as well as strategy. The management of the corporation can redesign the existent risk management procedure in order to guarantee assimilation with strategic planning procedures. Therefore, the administration of a firm needs to implement a continuous process that can investigate the overall capabilities of the corporate unit and at the same time the level of flexibility of the unit (Blaunstein, Trump and Linkov 2014). In addition to this, the proposed approach for implementation of an assimilated risk management and at the same time strategic planning procedure include creation of a team led by specialists who are experienced and have done these tasks before. Again, the members or else the participants of the selected team need to be chosen by the respective team leaders. The team leader can act as the specialist or in other words expert who can lead the process of integration of the risk management process and the strategic planning procedure. The effective team can in turn help in the process of development of different scenarios that are essentially driven by data, business driven as well as event determined. The management of the corporation can critically analyze the scenario and examine the degree of acceptability of the risks (McNeil, Frey and Embrechts 2015). Thus, it can be said that the management of business units need to monitor diverse scenario and arrange for regular tracking of particular scenario by various specialists in case if the level of the risks are acceptable. However, if the level of risk associated to the scenario is not acceptable, then the management needs to think about the process of mitigation and process of addressing the detected issues (Blaunstein, Trump and Linkov 2014). In addition to this, the proposed approach also needs to incorporate assimilated risk management procedure that also needs to touch different phases of project, programs as well as portfolios (Titman, Keown and Martin 2015). In addition to this, the mitigation projects also needs to be carried out instantly, the procedure of assessment of risk needs to continuous. The continuous risk mitigation procedure comprises of risk monitoring that acts as a fraction of the entire process of reviewing the program and managing incessantly. Furthermore, the process also involves the identification and mitigation of the residual as well as secondary risks (Meyer, Normative and Kunreuther 2016). In addition to this, the management of the corporation needs to ensure proper identification of the residual risk as well as secondary risks that persists even after implementation of diverse mitigation measures. Again, the residual risks can be considered as the risks that stay behind even after execution of different response policies. However, the secondary risks can be regarded as the direct consequences of the implementation of the risk response. Therefore, the administration of particular needs to make it certain that the risks of the firm is appropriately evaluated as well as managed normally as part of the process of risk management (McNeil, Frey and Embrechts 2015). Creation of symbiotic relationship between risk management as well as strategic planning activities boosting ability for executing strategies and managing ris ks The importance of business continuity planning has been grown rapidly from the past few years. Risk Management as well as Strategic Planning act as tow major key business process as implemented at distinct rates (Blaunstein, Trump and Linkov 2014). There are two integral functions involving in continued separation as well as misalignment leading towards overabundance of potential issues. In case firms fails in incorporating strategic planning into given risk management activities. Without possessing strong understanding of associated risks in aligning with growth strategy for a successful plan Executing a series should be well coordinating in case for Business Planning in way of integration activities for realizing full value of optimized business continuity management (Meyer, Normative and Kunreuther 2016). In other words, Business Continuity Management program integration aligning with sharing governance as well as steering committee members. This reveals involving in Business Continuity Management for proper assessment process. This requires assisting in interview preparation. It means participating in shareholder interviews by listening towards interruption risks for bringing improvement in Business Continuity Planning. Therefore, this concept mainly support towards risk assessment analysis (Blaunstein, Trump and Linkov 2014). Developing Business Continuity Management for informed risk resiliency improvements as well as possible recovery strategies for keeping right focus on cost versus risk reduction benefits Enhancing risk scenario analysis involves viewing at the interruption risk affecting insights (Meyer, Normative and Kunreuther 2016). In addition, conducting Business Continuity Management enables proper conducting proper capability examination in case of post incident analysis. In other words, it requires using more impact way after viewing at the interruption risks in worst scenarios. Performing with the post-interruption event analysis will be determining with the effective programs especially for risk identification and managerial actions at the same time. Performing a Business Continuity Management business renders detailed qualification on interruption risks for bringing improvement for program determination of risk tolerance and acceptance in the most appropriate way (Titman, Keown and Martin 2015). Conclusion At the end of the study, it is concluded that business interruption risks give rise to effective strategic planning process. Every organization is exposed to certain risks. It takes into consideration some of the pure risks such as Fire, Explosion as well as chemical release at the same time. It ensures organization for withstanding any risk or failure of systems for continuing operations without any kind of struggle. Risk Management as well as Insurance Planning requires for an organization for reviewing the risk management strategies opting the risk transfer measures such as availing Insurance cover. Most of the time coordination between technical as well as operational departments considering as unbiased study for technical risk management for future analysis purpose Some of the emerging challenges considers as de regulation especially in Insurance Market. In other words, a global market affects the local markets options in case of self-insurance. Risk and capital management actively seek as well as retain risk emphasizing upon risk and capital management. Focus areas of Insurance Management is identifying internal as well as external pure risks. Existing Risk Control Measures Review with defined guidelines as well as documentation at the same time Reference List Akotey, J.O. and Abor, J., 2013. Risk Management in the Ghanaian Insurance Industry, Qualitative Research in Financial Markets. Baxter, R., Bedard, J.C., Hoitash, R. and Yezegel, A., 2013. Enterprise risk management program quality: Determinants, value relevance, and the financial crisis. 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