Last week’s record cold ground the University to a halt, but it certainly didn’t slow progress on the Risk Management and Insurance Applied Learning Consulting Project. The spring semester yet again gives MBA students and a group of carefully selected, outstanding BBA’s the chance to tackle a real-world business opportunity in partnership with industry leading organizations.
In spring 2018, the project involved evaluating the feasibility of a captive insurance company for an insurer. As a first-year MBA, I was uncertain how much we could teach the company about risk management tools—insurance is their forte, after all! I quickly learned that there was plenty of room to add value; captive insurance is a specialty topic that not many know about.
Each week, we uncovered research and spoke with industry experts to evaluate regulation, financial feasibility, and long-term strategic implications. We used tools we had practiced in other classes, such as @Risk simulation, and with the help of undergraduate analysts, performed actuarial analyses. We gained valuable teamwork, communication, and problem-solving skills along the way. The high-level access to company data, close collaboration with executives, and guidance from our company representative all contributed to a high-quality final recommendation presented to a room full of the company’s top executives.
The spring 2019 Applied Learning Project takes us to the airline industry and another specialty topic within the risk and insurance industry: construction and corporate real estate.
After years of limited capital expenditure on infrastructure, airlines are ramping up spending to improve the customer experience. LaGuardia Airport in New York alone will see $8 billion invested in upgrades and improvements (WSJ). The increase in spending carries unique risks as general contractors are brought in to build out the airline’s vision, often in close proximity to multi-million dollar aircrafts.
Our challenge? Create a set of tools to be used by one of the country’s largest airlines to educate their teams on the value of risk management. Thoughtful construction risk management could reduce overall project costs by one percent, resulting in millions of dollars in savings for the company and opportunities to reinvest savings in strategic initiatives to gain a competitive edge. A very different challenge to be sure, but I speak for the team when I say how excited we are to be part of such an important project.