Risk Management for Medibank Private
Added on 2020-05-28
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Running head: AUDITING THEORY AND PRACTICEAuditing Theory and Practice Name of Student:Name of University:Author’s Note:
AUDITING THEORY AND PRACTICE1Table of ContentsIntroduction......................................................................................................................................2Risk Analysis...................................................................................................................................2Evaluation of risks and control environment...................................................................................4Conclusion.....................................................................................................................................12References......................................................................................................................................13
AUDITING THEORY AND PRACTICE2IntroductionMedibank is considered has one of the best private health insurance company operatingin Australia. Some of the main noted services has been seen to be taken into consideration withonline health, telephone and initiatives for coaching programs in Australia. The important formof the investment activities of the company is seen to be taken into account with the investmentactivity in the community programs. The various types of the investment activities have beenfurther seen to be based on the support provided to the local programs for promoting childhealthcare activities. Some of the important aspects of the report has been able to cover riskanalysis, evaluation of risks and control environment. The several types of the aspects of theexecutive report are further compared with QBE Insurance Group (Cannon & Bedard, 2017).Risk AnalysisAs per the capital management and dividends statements it is identified that the varioustype of the profile maintained for the strong financial risk profile are seen to be conducive tomeet the financial commitments. From the risk analysis facts given in the annual report of thecompany it is discerned that the company’s total health insurance business related to the capitalis seen to be business-related capital of 13.9 percent of premium revenue. Some of the inherentmaterial business risks of the company has been seen to be taken into account with healthcarecosts and utilisation, competition and customer retention, product pricing and design, improperclaims, capital management, investment returns, healthcare provider agreements, informationtechnology and regulation (Dennis, 2015).Inherent RiskControl MeasuresIncreasing nature of the health care cost andutilisation are seen to be based on the severaltypes of the factors which is related to theincreasing healthcare costs and effect on theproduct margin. This has seen to erode thevarious type of the values which is seen to berelated to the reducing cover (Hu, Chen, &We, 2016).Medibank is seen to be prompt enough foraddressing the long-term affordability of thecustomer’s approach which has stated withthe long-term affordability for the customers.The private health insurers and comparison ofthe data is done in the website, competing toattract and retain the members on price,channels and services.The new entrants are seen to be having theMedibank is seen to be continually assessing
AUDITING THEORY AND PRACTICE3option for partnering with the existingparticipants, which is major threat to theinsurance business in Medibankthe product and the channel mix for theoptimisation of the margins which is seen tobe based on the ensuring competitiveapproach (Rathnayaka, Khan, & Amyotte,2014).The different types of the products may attimes get mispriced or incorrectly designedwhich will be subject to government approval.The product profitability is seen to be closelymonitored and compared with the actuarially-derived costings.The various types of the improper claims forthe material source is further seen to behaving several types of misrepresentationassociated to the fraudulent and erroneoushealth claims done by the members and theservice providers.The company is able to manage such risk withpayment integrity program focusing on theidentification, recovery, prevention and therecovery of the improper claims (Hosseinpour& Jans, 2016).The capital management team of theMedibank is seen to provide the significantnature of the factors resulted from investmentportfolio which is seen to be subject to tenoral market risks.These types of the market risks have beenfurther seen to be classified with the interestexchange rates and market volatility whichcan have a significant effect on the incomevolatility. The company is able to managesuch risk with the use of capital andinvestments which are seen to be in line withthe varied factors associated to the riskappetite and investment (Habib, Jiang,Bhuiyan, & Islam, 2014). In addition, this,Medibank strives to reach the agreement ofthe risk based on the attaining a certainagreement with the providers, contingencyplans which are seen to be in favour with thenegotiation scenarios.The information technology for Medibank hasbeen seen to be prone to cyber-attacks andfailure in the critical data, systems andprocesses.The IT controls are under continuous reviewwhich are protected with the use of responsetools and preventive measures. Thegovernment regulation and policy is furtherseen to be susceptible to changes potentiallydecreasing the effectiveness of the regulatoryincentives resulting in the members reducinglevel of cover (Glover, Taylor, & Wu, 2017).Evaluation of risks and control environment The risk management framework for Medibank is seen to clearly set out with the numberof the factors which are clearly defined criteria for analysis. The evaluation and the prioritisationis done as per material business risks. Some of the main factors are included with the systematic
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