Ra Insurance Company

In: Business and Management

Submitted By Ita900
Words 2325
Pages 10
RA Insurance Company: Risk assessment and internal controls

Maastricht University School of Business and Economics Maastricht, 20 September 2013 Abel, S. I6077467 Isenia, N. I6064905 Liu, B. I6063209 Study: MSc IB Controlling Course code: EBC4069 Group number: 3 Tutor name: R. Maessen Writing assignment: Case Study RA

The case study “ RA (Rest Assured) Insurance Company concerns a company that was involved in a large life insurance scam. RA was facing several risks that had a dramatic impact on the company because of bad decisions, lack of business controls, and a corporate culture that was inefficient and ineffective. The main objective of this case memo is to identify and appropriately assess the risks that the RA insurance company was facing. Further, this case memo introduces internal control solutions to manage those risks. Finally, this case memo provides examples of other companies that have faced problems similar to RA’s “churning” of policies. Identifying and assessing risks There are several strategic, sales & marketing, corporate culture, and corporate governance risks that are causing problems at RA. Firstly, the risk that the maximum amount of possible life insurance is reached is certainly a risk that RA is unable to manage. Although the overall number of life insurance policies was declining, RA continued to put its focus on this product. This might have put additional pressure on the sales force, forcing salesmen perhaps to commit fraud. Although this risk is difficult to control, the management should at least consider the impact of market trends on the company. The impact of having a cap in the amount of possible life insurances is considered to be high and its likelihood of occurrence is medium. In addition to the risk mentioned above the risk of salesmen committing fraud is the main issue for causing problems at RA. It is important to…...

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