Operational risk and marketing risks

Operational Risk

Operational Risk and the Marketing Risks

Ignacio Reclusa

Risk Management and Insurance

June 2014

Operational Risk | June 2014 2

1. Introduction

2. Operational Risk Triptych

3. Business Case: Marketing Risks

Index


• One of the major issues an Operational Risk practitioners faces is how to approach such a wide range of subjects covered

under the umbrella of “Operational Risk”.

• In this sense, Operational Risk can be understand as “the risk of loss resulting from inadequate or failed internal processes,

people and systems or from external events”.

• This document aims to present a framework to systematically approach operational risk matters. Later, a real example from

the insurance industry will put into practice this framework.

1. Introduction


• The model presented below is called the “Operational Risk Triptych”. A triptych is a piece of art made of

three paintings connected to each other in a way that allows the two outer ones to fold in towards the larger central one. In this

sense, the “timeline” and “decision making process” figuratively speaking fold in toward the “pipeline”.

2. Operational Risk Triptych


• Find below a summary from a systematic analysis of an insurance marketing competitive strategy:

3. Business CaseMarketing Risks

Should indirect

distribution be used?

Has intensive spent

being made?

What targeting and

positioning was

launched?

How market penetrations

is made?

How much spent is

made on expansion?

Prices meet competition?

Should the company

have its owns sales

force?

What actions emphasize

the brand appeal?

How price-sensitive

demand is look after?

Have distribution been

intensified?

How market position is

being supported?

Are prices stable or

being reduced?

Is it an already mature

product in the market?

Should the mix be kept

small?

What improvements to

product are made?

Any action to distinguish

the product?

Has the organization

diversified?

Should the mix be

pruned?

Is the company attending

at the minimum?

Is the company

reducing advertising?

Should prices go up or

down?

Salesmen are prepared

to understand the

product?

How customers will

perceive promotions?

What is the price-to-

customer target?


Brief Bio

International Risk Management and Insurance senior

management expert, with over 13 years of experience in the

industry.

I have a broad experience in helping organizations step up

to their true potential. Uniquely positioned to talk about

operational risks and how to turn productivity into a healthier

organization.

I have lectured to professional groups and business

audiences.

Ignacio Reclusa

Risk Management and Insurance

M +34 677 023 800

www.ignacioreclusa.com

[email protected]