Essay Available:
Pages:
11 pages/≈3025 words
Sources:
13
Style:
Harvard
Subject:
Business & Marketing
Type:
Essay
Language:
English (U.K.)
Document:
MS Word
Date:
Total cost:
$ 53.46
Topic:
Insurance and Risk Management
Essay Instructions:
Coursework Assessment 2
Essay on industry issues
As part of the Module your attention has been drawn to a number of issues which are currently of importance to the UK insurance industry.
Your task is to take this knowledge and make a comparison between the situation facing insurance in the UK with that facing the insurance market in one other country. You may choose any country you wish but you should give careful consideration to the ease of access to relevant data before you settle on your choice.
Do remember that I have concentrated on introducing you to some of the current industry issues. There will be others. I have my own special areas of interest but beyond that will have only a general knowledge of a particular aspect of insurance. I am just as likely to learn something from the research that you put in to your assessment.
Be economical in your use of headings and sub-headings and do not overdo the use of numbered lists or bullet points. You may, however, make use of any tables or diagrams that assist the presentation of your story. Adopt one of the conventional referencing styles (I suggest Harvard – you will find guidance on this and other matters in the Student Handbook). Observe a word limit of between 3,000 and 4,000 words.
* Please note that English in not my first Langugae.
Essay Sample Content Preview:
Name:
University:
Instructor:
Date:
Insurance and Risk Management
Introduction
The insurance systems in various countries in the world have changed a lot in the last couple of decades. The risk management is very vital in the growth of the insurance sectors in the market. Organizations in many parts of the world have embraced proper methods of handling the insurance concepts, and the risk management has been a key drive in the development of the insurance system. The insurance sector and the concepts of risk management are also important in the overall growth of the economy. This paper explores the various issues that are currently of importance to the insurance industry in the United Kingdom, in comparison with the factors surrounding the insurance industry in the United States of America.
In the European countries, the insurance industries mainly engage a combination of the state securities, and the equities that are floated by the public markets (IMF, 2004, p.79). However, the United Kingdom insurance industry usually deals with equity. Risk management in the UK has taken different dimensions from those practiced by the other European countries in the region. The national market in the UK does not overly offer favorable combination of securities and equities that are state owned, due to the differences that exist among the various governments in the entire Kingdom (IMF, 2004, p.79). The capital markets in the UK portray varied properties from the public financial setups, due to several regulatory measures that have been created by the governments (IMF, 2004, p.79). This system is different from the insurance systems in several other developed countries in the world.
Risk management and the corporate business in the UK and USA
Risk management has grown tremendously in the UK over the past few years. The risk management standards in the UK were established in the wake of the millennium, for the business related sectors (Berwick, 2007, p.13). However, this standardization was changed in the year 2002, when the risk management systems were changed by a group of companies and organizations (Berwick, 2007, p.13). These measures were taken in order to ensure that several issues that concern the field of risk management were rectified (Berwick, 2007, p.13). These organizations introduced new measures to be implemented for a healthy growth of risk management in the UK to occur. Risk management requires strategic planning. The risk managers are able to identify new possibilities in the risk management (Ward, 2001, p.8). The process of risk management involves relevant analysis, in order to trigger innovation and creativity in the field (Ward, 2001, p.8). This can help in addressing the problem of uncertainty in risk management.
The aspects that were regulated in this standardization of the risk management include the proper explanation of the terminologies used in the field of risk management (Berwick, 2007, p.14). This move greatly enabled the people to understand the concepts that are involved in risk management. Another issue that was addressed by this standardization is the method through which the management of risks is implemented (Berwick, 2007, p.14). This outlined the general processes involved in risk management in the UK. The structure of the whole process was also defined, in order to ensure that risk management is properly carried out by the professionals in the filed (Berwick, 2007, p.14). Lastly, the group standardized the major goals of risk management in the country, so as to harmonize the various objectives of risk management (Berwick, 2007, p.14).
These standard concepts were adopted by the European countries, including Spain and Germany (Berwick, 2007, p.14). However, this standardization was only confined to a few countries, especially in Europe. There are no international standards that have been accepted by the world, since many regional blocks define their own risk management systems (Berwick, 2007, p.14). The corporate business has been extensively used by many stock markets in the world, and several audit firms, due to the risk management that is involved in this type of business. In the UK, the corporate business was streamlined by the Cadbury Report in 1992, which evaluated the financial issues that surround the corporate business (Berwick, 2007, p.14). The Cadbury Report was reviewed later, in order to monitor the risk management and the corporate business (Berwick, 2007, p.14). This saw the development of the risk management sector in UK.
In the USA, the corporate world was collapsing before the Sarbanes-Oxley Act in 2002 (Berwick, 2007, p.16). This Act was passed to ensure that the business executives in the corporate systems do not engage in illicit financial dealings (Berwick, 2007, p.16). The financial markets in the USA were deteriorating fast, and the risk management was suffering acutely as a result. The auditing practices in the USA had weakened, and the independence of the corporate business had been compromised (Berwick, 2007, p.16). However, after the SOX Act, the aspects of risk management were adequately addressed and penalties for accounting malpractices were introduced (Berwick, 2007, p.16). The control of the risk management in the USA received massive boost from the regulations set by the SOX Act, since it provided relevant measures that enable proper implementation of risk policies (Berwick, 2007, p.16).
In the UK, there were no regulations for reviving bankrupt banks in the financial markets, before the year 2007 (Kolb, 2010, p.351). The banks in the USA have introduced measures to manage risks by defining that the losses in the banks will be shared among the shareholders only, without affecting the creditors and the debtors (Kolb, 2010, p.351). In the US, the banks are also legally closed by the federal systems, in order to ensure that the losses are not entirely born by the shareholders. This has attracted different opinions from the people, concerning the liquidity problems that are facing the USA (Kolb, 2010, p.351). On the insurance matters in the liquidation of the banks in the USA, the losses are often directed to the insured claimants and depositors (Kolb, 2010, p.351). This has helped to ensure that the customers are not inconvenienced by the banking institutions, through malicious risk management practices.
The management of risks in the market requires several aspects to be carried out. For example, the type of risks must be well defined in this field (Skipper & Kwon, 2007, p. 289). The risks that are covered in risk management have diversified with the growth of business activities in the world. They include the hazard, financial, operational and management risks in the marketplace (Skipper & Kwon, 2007, p. 289). However, the world is more focused on the risks that cause financial harm in the process of economic development (Skipper & Kwon, 2007, p. 289). The risk management has greatly helped in the growth of world economies, especially by increasing the present wealth, and reducing the possible future expenses (Skipper & Kwon, 2007, p. 289). The rates of the prevalent discounts in the markets are also reduced by proper risk management, and this leads to a healthy economic development in the world.
Identification of risks in the market
The cash flows for the companies are used to detect the possible risks that face the risk management in the UK and other countries in the world (Skipper & Kwon, 2007, p. 296). This is because the cash flows usually give information on the various sources of capital in the company, thus any risks that might be encountered are easily noted. The monetary forecasts that are done in the companies are helpful in risk detection over a period of time. Identifying the risks at an early stage can help proper management of the risks by professionals, so as to ensure that the organizations do not collapse due to financial problems caused by unnecessary risks.
The production process in the manufacturing industry can also be used to identify the risks in the production of commodities and the ensuing profitability or loss making (Skipper & Kwon, 2007, p. 296). Through evaluating the production process, the hidden risks in can be exposed and proper measures taken to address the risk problem (Skipper & Kwon, 2007, p. 296). Thus, risk management largely relies on the evaluation of the production process for the risks to be identified and eliminated adequately. However, this process of identifying the risks in the business is only based on the assumption that the risks are caused by the internal operations in the organizations (Skipper & Kwon, 2007, p. 296). These risks are classified as operation oriented, since they occur due to the operations in the manufacturing industry and the organizational structure.
Another method that is used by the risk management professionals to identify the risks in the business is conducting interview sessions with the prominent personnel in the companies (Chelst & Bodily, 2000, p. 1420). This can be used to identify the various risks that exist in the business world, since the business leaders in the organizations can provide reliable information concerning risks (Chelst & Bodily, 2000, p. 1420). Interview sessions are helpful especially if the scope of the risk identification is not broad (Skipper & Kwon, 2007, p. 289). The planning process in the running of the organizations can pose some risks to the business, and the decision makers can thus be reliably used to offer information concerning the risks facing the organizations.
Insurance systems in various sectors in the UK and the USA
The insurance industry is very helpful in many sectors, since it ensures the spreading of risks over a large pool. This is often used as a measure of the economic performance in various sectors in the business environment. In the United Kingdom, there are many sectors, ranging from private to public, which rely on the insurance industry in order to improve economically. The United States, the insurance industry has immensely been on the limelight, due to the numerous reforms that have been proposed by the American citizens. There are many sectors that coordinate with insurance industry in the USA, and various challenges have been notable to this industry.
Motor insurance
The motor vehicle and the transport sector in the UK are surrounded by several insurance issues. Since the enactment of the Road Traffic...
University:
Instructor:
Date:
Insurance and Risk Management
Introduction
The insurance systems in various countries in the world have changed a lot in the last couple of decades. The risk management is very vital in the growth of the insurance sectors in the market. Organizations in many parts of the world have embraced proper methods of handling the insurance concepts, and the risk management has been a key drive in the development of the insurance system. The insurance sector and the concepts of risk management are also important in the overall growth of the economy. This paper explores the various issues that are currently of importance to the insurance industry in the United Kingdom, in comparison with the factors surrounding the insurance industry in the United States of America.
In the European countries, the insurance industries mainly engage a combination of the state securities, and the equities that are floated by the public markets (IMF, 2004, p.79). However, the United Kingdom insurance industry usually deals with equity. Risk management in the UK has taken different dimensions from those practiced by the other European countries in the region. The national market in the UK does not overly offer favorable combination of securities and equities that are state owned, due to the differences that exist among the various governments in the entire Kingdom (IMF, 2004, p.79). The capital markets in the UK portray varied properties from the public financial setups, due to several regulatory measures that have been created by the governments (IMF, 2004, p.79). This system is different from the insurance systems in several other developed countries in the world.
Risk management and the corporate business in the UK and USA
Risk management has grown tremendously in the UK over the past few years. The risk management standards in the UK were established in the wake of the millennium, for the business related sectors (Berwick, 2007, p.13). However, this standardization was changed in the year 2002, when the risk management systems were changed by a group of companies and organizations (Berwick, 2007, p.13). These measures were taken in order to ensure that several issues that concern the field of risk management were rectified (Berwick, 2007, p.13). These organizations introduced new measures to be implemented for a healthy growth of risk management in the UK to occur. Risk management requires strategic planning. The risk managers are able to identify new possibilities in the risk management (Ward, 2001, p.8). The process of risk management involves relevant analysis, in order to trigger innovation and creativity in the field (Ward, 2001, p.8). This can help in addressing the problem of uncertainty in risk management.
The aspects that were regulated in this standardization of the risk management include the proper explanation of the terminologies used in the field of risk management (Berwick, 2007, p.14). This move greatly enabled the people to understand the concepts that are involved in risk management. Another issue that was addressed by this standardization is the method through which the management of risks is implemented (Berwick, 2007, p.14). This outlined the general processes involved in risk management in the UK. The structure of the whole process was also defined, in order to ensure that risk management is properly carried out by the professionals in the filed (Berwick, 2007, p.14). Lastly, the group standardized the major goals of risk management in the country, so as to harmonize the various objectives of risk management (Berwick, 2007, p.14).
These standard concepts were adopted by the European countries, including Spain and Germany (Berwick, 2007, p.14). However, this standardization was only confined to a few countries, especially in Europe. There are no international standards that have been accepted by the world, since many regional blocks define their own risk management systems (Berwick, 2007, p.14). The corporate business has been extensively used by many stock markets in the world, and several audit firms, due to the risk management that is involved in this type of business. In the UK, the corporate business was streamlined by the Cadbury Report in 1992, which evaluated the financial issues that surround the corporate business (Berwick, 2007, p.14). The Cadbury Report was reviewed later, in order to monitor the risk management and the corporate business (Berwick, 2007, p.14). This saw the development of the risk management sector in UK.
In the USA, the corporate world was collapsing before the Sarbanes-Oxley Act in 2002 (Berwick, 2007, p.16). This Act was passed to ensure that the business executives in the corporate systems do not engage in illicit financial dealings (Berwick, 2007, p.16). The financial markets in the USA were deteriorating fast, and the risk management was suffering acutely as a result. The auditing practices in the USA had weakened, and the independence of the corporate business had been compromised (Berwick, 2007, p.16). However, after the SOX Act, the aspects of risk management were adequately addressed and penalties for accounting malpractices were introduced (Berwick, 2007, p.16). The control of the risk management in the USA received massive boost from the regulations set by the SOX Act, since it provided relevant measures that enable proper implementation of risk policies (Berwick, 2007, p.16).
In the UK, there were no regulations for reviving bankrupt banks in the financial markets, before the year 2007 (Kolb, 2010, p.351). The banks in the USA have introduced measures to manage risks by defining that the losses in the banks will be shared among the shareholders only, without affecting the creditors and the debtors (Kolb, 2010, p.351). In the US, the banks are also legally closed by the federal systems, in order to ensure that the losses are not entirely born by the shareholders. This has attracted different opinions from the people, concerning the liquidity problems that are facing the USA (Kolb, 2010, p.351). On the insurance matters in the liquidation of the banks in the USA, the losses are often directed to the insured claimants and depositors (Kolb, 2010, p.351). This has helped to ensure that the customers are not inconvenienced by the banking institutions, through malicious risk management practices.
The management of risks in the market requires several aspects to be carried out. For example, the type of risks must be well defined in this field (Skipper & Kwon, 2007, p. 289). The risks that are covered in risk management have diversified with the growth of business activities in the world. They include the hazard, financial, operational and management risks in the marketplace (Skipper & Kwon, 2007, p. 289). However, the world is more focused on the risks that cause financial harm in the process of economic development (Skipper & Kwon, 2007, p. 289). The risk management has greatly helped in the growth of world economies, especially by increasing the present wealth, and reducing the possible future expenses (Skipper & Kwon, 2007, p. 289). The rates of the prevalent discounts in the markets are also reduced by proper risk management, and this leads to a healthy economic development in the world.
Identification of risks in the market
The cash flows for the companies are used to detect the possible risks that face the risk management in the UK and other countries in the world (Skipper & Kwon, 2007, p. 296). This is because the cash flows usually give information on the various sources of capital in the company, thus any risks that might be encountered are easily noted. The monetary forecasts that are done in the companies are helpful in risk detection over a period of time. Identifying the risks at an early stage can help proper management of the risks by professionals, so as to ensure that the organizations do not collapse due to financial problems caused by unnecessary risks.
The production process in the manufacturing industry can also be used to identify the risks in the production of commodities and the ensuing profitability or loss making (Skipper & Kwon, 2007, p. 296). Through evaluating the production process, the hidden risks in can be exposed and proper measures taken to address the risk problem (Skipper & Kwon, 2007, p. 296). Thus, risk management largely relies on the evaluation of the production process for the risks to be identified and eliminated adequately. However, this process of identifying the risks in the business is only based on the assumption that the risks are caused by the internal operations in the organizations (Skipper & Kwon, 2007, p. 296). These risks are classified as operation oriented, since they occur due to the operations in the manufacturing industry and the organizational structure.
Another method that is used by the risk management professionals to identify the risks in the business is conducting interview sessions with the prominent personnel in the companies (Chelst & Bodily, 2000, p. 1420). This can be used to identify the various risks that exist in the business world, since the business leaders in the organizations can provide reliable information concerning risks (Chelst & Bodily, 2000, p. 1420). Interview sessions are helpful especially if the scope of the risk identification is not broad (Skipper & Kwon, 2007, p. 289). The planning process in the running of the organizations can pose some risks to the business, and the decision makers can thus be reliably used to offer information concerning the risks facing the organizations.
Insurance systems in various sectors in the UK and the USA
The insurance industry is very helpful in many sectors, since it ensures the spreading of risks over a large pool. This is often used as a measure of the economic performance in various sectors in the business environment. In the United Kingdom, there are many sectors, ranging from private to public, which rely on the insurance industry in order to improve economically. The United States, the insurance industry has immensely been on the limelight, due to the numerous reforms that have been proposed by the American citizens. There are many sectors that coordinate with insurance industry in the USA, and various challenges have been notable to this industry.
Motor insurance
The motor vehicle and the transport sector in the UK are surrounded by several insurance issues. Since the enactment of the Road Traffic...
Get the Whole Paper!
Not exactly what you need?
Do you need a custom essay? Order right now: