FIN 238 Risk and Insurance Management (BBA-BI: 4 Semester)

FIN 238 Risk and Insurance Management
(BBA-BI: 4th Semester)
Course Objectives
The aim of this course is to enable students to organize and manage insurance business with a
focus on risk management of insurance business. At the end of the course the students will have
basic understanding of ownership and operational aspects of insurance companies along with
knowledge and skill to identify, measure and manage risk related to insurance business.
Course Description
This course introduces students the concepts and basic principles of risk management in
insurance business. They will acquire skills to identify, measure and manage risk. The course
also helps students understand how insurance companies are incorporated and operated.
Accordingly, the course covers – risk management and its objectives, risk identification and
measurement, pooling arrangement and diversification of risk, insurability of risk, contractual
provisions and legal doctrines, and analysis tools used in corporate risk management. The course
further includes – insurance organization and management, insurance company operations, and
financial management of insurance companies.
Course Outcomes
On successful completion of this course students will be able to:
 understand different concepts of risk in the context of insurance business
 identify insurability of risk and measure them
 understand contractual provisions and legal doctrine related to insurance
 apply appropriate tools for risk analysis and management
 follow appropriate process for establishing various types of insurance companies
 determine the rate and underwrite various insurance policies
 settle the claims
 understand how financial statements of insurance companies are prepared
 manage investment funds of insurance companies
Course Contents
Unit 1: Risk Management and Its Objectives 8 hours
Meaning of risk; Type of Risk Facing Business and Individuals; Risk Management Process and
Methods; Risk Management in Organizational Structure; Need for Risk Management Objective,
Understanding the Cost of Risk; Firm Value Maximization and the Cost of Risk; Individual Risk
Management and the Cost of Risk; Risk Management and Societal Welfare
Unit 2: Risk Identification and Measurement 5 hours

Risk Identification; Basic Concepts from Probability and Statistics; Evaluating the Frequency
and Severity of Losses.
Unit 3: Pooling Arrangements and Diversification of Risk 5 hours
Risk Reduction through Pooling Independent Losses; Pooling Arrangements with Correlated
Losses; Insurers as Managers of Risk Pooling Arrangements.
Unit 4: Insurability of Risk, Contractual Provisions and Legal Doctrines 6 hours

Factors that Limit the Insurability of Risk; Contractual Provisions that Limit Coverage, Legal
Doctrines.
Unit 5: Analysis Tools Used in Corporate Risk Management 6 hours

Risk Management Tools; Calculating Frequency and Severity of Losses from Historical Data;
Using Entire Probability Distributions; Correlation Analysis; Use of Discounted Cash Flow
Analysis.
Unit 6: Insurance Companies and Their Management 6 hours

Formation of Insurance Companies; Ownership Types of Insurance Companies; Organisational
Structure and Concept of Departmentalization; Scope, Authorities and Responsibilities of each
Department; Management of Life, Non-life and Reinsurance Companies.
Unit 7: Insurance Company Operations 6 hours

Insurance Company Operation; Rate Making; Underwriting; Production; Claims Settlement;
Reinsurance; Alternatives to Traditional Reinsurance; Investments.
Unit 8: Financial Management of Insurance Companies 6 hours

Financial Management of Life insurers and Non Life Insurers; An Overview of Reporting of
Financial Statements of Insurance Companies; Directives Related to Preparation of Financial
Statements; Asset and Liabilities Management; Importance of Insurance Fund; Investments of
Insurance Fund: objectives of investment policy, investments directives, constrains of
investments, mobilizing large resources; Taxation in insurance
Basic texts
Harrington, E. Scott and Niehaus R. Gregory. Risk Management and Insurance (2nd ed), Delhi:
Tata McGraw Hill.
Rejda, Georrge E. Principles of Risk Management and Insurance (10th ed). New Delhi: Pearson
Education.
References
McNamara, Michael J. Principles of Risk Management and Insurance (2nd ed). New York:
Addison-Wesley.
Dorfman, M. S. Introduction to Risk Management and Insurance, Prentice Hall.
Arthur, Williams, C. Smith, Michael L. & Young, Peter C. Risk Management and Insurance,
McGraw Hill.
Trieschman, James S., Sandra G.Gustavsonh, & Robert E.Hoyt. Risk management and
Insurance, Singapore: Thomson Asia Pvt. Ltd.

FIN 238 Risk and Insurance Management (BBA-BI: 4 Semester)

Uploaded by

Copyright:

Available Formats

FIN 238 Risk and Insurance Management (BBA-BI: 4 Semester)

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

FIN 238 Risk and Insurance Management (BBA-BI: 4 Semester)

Uploaded by

Copyright:

Available Formats

FIN 238 Risk and Insurance Management

(BBA-BI: 4th Semester)

Unit 2: Risk Identification and Measurement 5 hours

Unit 4: Insurability of Risk, Contractual Provisions and Legal Doctrines 6 hours

Unit 5: Analysis Tools Used in Corporate Risk Management 6 hours

Unit 6: Insurance Companies and Their Management 6 hours

Unit 7: Insurance Company Operations 6 hours

Unit 8: Financial Management of Insurance Companies 6 hours

You might also like