Formative Assessment 1 - Case Study 1: The Suez Canal Crisis

The Suez Canal Crisis, and the role of the Finance Manager of the Insurance Industry. 

The activity requires research about the Suez Canal blockage crisis, and critically analyze the challenges that finance managers of the insurance industry faced for the efficient execution of the corporate finance activities and main responsibilities discussed in lesson 1. Consider analyzing the impact in the business working capital (use of cash), financing (need for short-term loans to pay affected parties like the Suez Canal Authority), and investing activities (delay real estate purchases of new buildings) or the dividend decision (not paying dividends) due to the blockage.  Provide possible solutions and strategies to mitigate those risks. Attached relevant articles and material to enhance your research. 

• https://www.insurancebusinessmag.com/ca/news/marine/multiple-insurance-lines-impacted-by-ever-givens-suez-canal-blockage-252203.aspx 
• https://www.forbes.com/sites/edwardsegal/2021/03/31/impact-of-suez-canal-crisis-on-companies-around-the-world-could-last-weeks/?sh=5f99499042d8  
• https://www.business-standard.com/article/international/insurance-companies-on-hook-for-millions-tied-to-suez-canal-crisis-121032900010_1.html 
• https://www.reuters.com/article/us-egypt-suezcanal-ship-insurance-idUSKBN2BG31A 
• https://www.insurancejournal.com/news/international/2021/05/10/613337.htm 

Students should start with the idea that the price of the stock (revenues) will be impacted in the short-medium term, especially the revenues from insurance company of the blocked ship – The UK P&I Club, and other major insurance businesses like Allianz. 

Prepare a short 150-word Arial 12 report and submit in VLE Due Date 9 Oct 11.59 CEST