chapter 2 Flashcards
What is the Three Lines of Defence Model in risk management?
First Line: Business units (e.g., underwriting & claims) manage day-to-day risks.
Second Line: Risk management & compliance functions oversee risk controls.
Third Line: Internal audit provides independent assurance.
Why is business planning important in insurance?
Aligns company goals with strategy
Helps in risk assessment & management
Ensures efficient resource allocation
Supports long-term financial stability
What is budgetary planning & control?
Setting financial targets for income & expenses
Monitoring actual vs. planned performance
Adjusting budgets to maintain profitability & financial health
What is the role of management information (MI) in insurance?
Provides data-driven insights for decision-making
Monitors business performance & risk exposure
Helps in regulatory reporting & compliance
What are the key factors influencing business performance monitoring?
Financial metrics (profitability, loss ratios)
Customer satisfaction & retention
Operational efficiency (claims processing times)
Compliance & regulatory adherence
A company wishes to improve communication across the business. What is the LEAST likely reason for this?
a.
A change in culture.
b.
Regulatory compliance.
c.
Engagement of staff.
d.
Improved efficiency.
b.
Regulatory compliance.
The purpose of a non-executive director within corporate governance is primarily to:
a.
provide an independent view on matters such as audit, management remuneration and risk management.
b.
lead the board of directors.
c.
work full time, managing part of the business on a day-to-day basis.
d.
provide an independent view specifically on regulation and financial matters, and be the organisation’s representative managing relations with shareholders.
a.
provide an independent view on matters such as audit, management remuneration and risk management.
Management actions are often regarded as consisting of four key elements. What are these?
a.
Organising; leading; controlling; finance.
b.
Planning; organising; leading; controlling.
c.
Controlling; finance; strategy; leading.
d.
Management; planning; organising; controlling.
b.
Planning; organising; leading; controlling.
Corporate culture can best be described as:
a.
the processes and procedures to meet regulations.
b.
the way we do things around here.
c.
the history of the business.
d.
what people do when you are watching
b.
the way we do things around here.
Corporate culture
Corporate culture refers to the shared values, beliefs, and behaviors that shape how employees interact and work within an organization.
The role of reviewing the management of debt, cash flow, liquidity and treasury matters within a business is most likely to belong to that of the:
a.
finance director.
b.
chief actuary.
c.
managing director.
d.
company secretary.
