Ra Insurance Company

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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…show more content…
Reversely, the listed issues can be used to improve the risk control. The risk of unconsciously selling the wrong product to customers is strongly related to the risk of wrong or incomplete information for customers. On the one hand, salesmen do not receive clear instructions or are not properly informed about the products they sell. On the other hand, customers failed to double-check policies they take out. This is due to misleading of salesmen, regardless whether unconsciously or not; individual sales material, which ought to be replaced by official display material of RA; and the total trust into salesmen. This risk is hard to control since it would indirectly suppose that RA’s salesmen are not trustworthy. The impact of occurrence is rather low and its likelihood is medium. RA was dedicated to “selling the right product, to the right client, in the right way” (p.1. case RA Insurance Company). In addition, RA assures its customers of “financial security and peace of mind”(p.1. case RA Insurance Company). However, RA did not fully live up to those promise statements. As mentioned before, salesmen were forced to resell life insurances to 2 customers. This clearly indicates that the business plan and the marketing plan were not consistent with one another. The impact of occurrence of this risk, a gap between the market image of a company and its business model,

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