Managing Risk – the Human Factor

Managing Risk – The Human Factor

Laura Shoalts

Professor Joe Scott

Managing Project Risk

March 08th, 2017

Risk Management

Risk management is an important part of every project. Even better, every organization has to invest in risk management throughout its operations. Most of the projects that an organization ventures into have some degree of risk associated with them. The biggest risk is the risk of losing the investment and failure to get the expected returns. It is worth noting that organizations invest in these projects with the aim of getting returns from the investment. Therefore, there is a need to conduct and effective risk analysis is conducted. Risks in these types of projects are caused by unforeseen circumstances that hinder the achievement of the project goals. Though it is not possible to predict the future accurately, some degree of projection is needed that so that plans of dealing with the risks are developed.

Scope of the project

The project was undertaken by a company that I am currently working for. The company is a specified disease and illness health insurance company. Due to competition in this industry, new products are always brought up so that customers have a variety to choose from. Recently, the company opened a case management department in 2014 to give policyholders the chance to do a short term upgrade in their medical benefits if they had a serious medical condition or any medical issue that required higher health coverage. The idea behind this project was to help our customers enjoy more benefits from their places. It was a marketing strategy to retain clients and grow our business. Just as every other company goes around expanding its products base for better service to the customers, there was hope and expectation that the project would be successful. The project did not involve many stakeholders. It was passed solely by the department in charge (Fernández-Diego, 2013).

Project risks

The primary objective of the new project was to allow policyholders to upgrade the policies so that they get higher benefits when faced with a serious medical condition. It is worth noting that the company is a profit making organization and thus the expectation is the claims are much less than the premiums paid. Therefore, one major risk to the project was the case of a high number of claims falling under the category. There was a risk that a large number of the policyholders could suffer the serious medical condition and make the claims. This would result into high claims cost paid by the company. Perhaps the company should have looked at the worst-case scenario where most of its clients had serious medical conditions, and make a plan for it. Furthermore, due to the high benefits, the company could lose a lot of money through payments of claims.