Scribd
Upload
76 views

Assignment 2

The document discusses the development of a Business Continuity Plan (BCP) for ABC Insurance Ltd in Barbados to prepare for the hurricane season. It outlines several key components for the BCP, including: 1) Three phases of the plan - Business Impact Analysis, Threat Analysis, and Impact Scenarios. 2) Recommending a "hot site" disaster recovery approach that allows full functionality and minimal downtime. 3) Three critical crisis management plan components - public relations, a crisis management team, and clearly defined roles and responsibilities. 4) Two threats to consider - halting new policies due to claims volume, and potential business impacts and losses from flooding.

Uploaded by

Jan Murray-Farrell
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
76 views

Assignment 2

The document discusses the development of a Business Continuity Plan (BCP) for ABC Insurance Ltd in Barbados to prepare for the hurricane season. It outlines several key components for the BCP, including: 1) Three phases of the plan - Business Impact Analysis, Threat Analysis, and Impact Scenarios. 2) Recommending a "hot site" disaster recovery approach that allows full functionality and minimal downtime. 3) Three critical crisis management plan components - public relations, a crisis management team, and clearly defined roles and responsibilities. 4) Two threats to consider - halting new policies due to claims volume, and potential business impacts and losses from flooding.

Uploaded by

Jan Murray-Farrell
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

Student ID: 4254

Risk Management Course Assignment 2


Given the fact that Barbados is impacted by the hurricane season every year, ABC Insurance
Ltd. decided to develop a Business Continuity Programme. It was discussed by the Board of
Directors and the tasks of developing and implementing has been assigned to the Risk
Manager.
1. What are the three phases that should be incorporated into the programme and,
for each phase, provide concise explanation of two things that should be
considered under each phase. (15 marks)

o Business Impact analysis (BIA)

a. ABC Insurance Ltd’s critical business processes and prioritize these processes which
need to be recovered immediately following the hurricane, taking in to consideration the
interdependency of the business functions and the amount of time needed to restore the
business to an acceptable level after the hurricane.
b. Identify the human resources needed to recover and operate each process. In this
instance how many persons would be needed from their claims, IT and the facilities
departments and the resources each person would require to perform the critical
activities.

o Threat (risk) analysis

a. Loss of electricity as a result of the hurricane could impact ABC’s operations as client
information systems would not be available, therefore the claims departments would e
adversely affect as they would be unable to process claims which could lead financial
loss.
b. Damage to the ABC’s physical plant could prevent clients from entering the building to
pay premiums which would result in loss of revenue.

Impact scenario
a. ABC’s location is as such that ground floor which houses the claims and IT department
has sustained major damage from flooding. Persons are unable to access the building
and most of the computer has suffered damage. Contingencies put in place to have
persons work remotely or from a DR site which is also houses a function data center.

b. Due to the hurricane ABC’s Communications Department has been unable to have any
access to any modes of communication, therefore they are unable to inform their clients
and third investors such as reinsurers, of their current circumstances. Meanwhile other
insurance companies are able to carry out this function moderately. This may result in
damage to reputation, financial loss and even loss of customers.
These scenarios could lead to identifying what specific tools and systems are needed to
allow the department to operate effectively, even on a lesser scale.

2. Consider the three types of DR sites. Recommend one of them as the preferred
type for ABC’s BCP explaining (at least 2 points) what makes it preferable to the
other two. (5 marks)

o A disaster recovery site is a place that a company can temporarily relocate to following a
security breach or natural disaster. A disaster recovery site ensures that a company can
continue operations until it becomes safe to resume work at its usual location or a new
permanent location. There are three types of DR sites namely Hot site, Cold site and
Warm site.

o Given the imminent threat of the hurricane it is recommended that the hot site is the
preferred type for ABC’s BCP.
1. The hot site would allow for ABC to have access to a fully functional data center with
hardware and software, critical personnel as the site may not allow the full staff
complement and customer data and would be typically staffed around the clock and is
ready for organizations to operate their IT in the event of the hurricane making land fall.
2. The production workload can be failed over to a DR site in a few minutes or hours,
ensuring minimal downtime and zero data loss and running without disruption so as to
ensure data synchronization between the sites.

3. In considering the crisis management aspect of the BCP, suggest 3 components


of the crisis management plan that you consider critical based on ABC’s
exposure, providing concise explanations. (6 marks)

1. Public Relations - ABC would wish to communicate and reassure their clients that they
are open for business as a crisis can have a negative effect on brand image. Effective
communication would ensure that ABC’s brand is one of its most valuable asset is
protected and that comes out of the crisis in the best possible and quickest way.

2. Crisis Management Team - This an interdepartmental team which is formed to mitigate


or eliminate risks to the business, develop a crisis manage plan, manage the crises and
assist in the recovery and learning phases. The team would include senior management
from a cross section of ABC and have the capacity to make knowledgeable decisions
which would help ABC come out of crisis with positive outcomes. Given that ABC is an
insurance company it would be paramount that the team is in communication with its
partners in particular the reinsurers.
3. Responsibility during the crisis/hurricane – Everyone who has been identified as having
a key role in managing the crisis at ABC, such as persons from the claims and IT
departments, should be aware of their specified task and their functions should clearly
defined and communicated to. ABC should endeavor to inform, prepare and ensure that
person understand their roles through training and simulation exercise before the crisis
occurs. Communication and the need for a contingency plan under this head is
imperative as members of the team themselves could fall victims to the hurricane.

4. Suggest two of the threats that should be considered in the preparation of the
BCP providing concise explanations of how they may affect ABC’s business
operations. (4 marks)

Two threats that should be considered in the preparation of the BCP for ABC’s business
operations;
1. ABC should stop issuing and updating policies because of the impending hurricane
as the treat of multiple claims coming in at one time which could cripple the
business.
2. Flooding from the hurricane may be seen as another potential threat to ABC
business operation as floods can cause significant losses, including fixtures and
fittings, loss of power to business, loss of valuable equipment resulting in the closure
of the business premises due to loss of revenue.

You might also like