Risk and Insurance Management Syllabus - BBA-BI (PU)

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Course Description

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

Unit Contents

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

Text and Reference Books

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.

 

Download Syllabus
  • Short Name N/A
  • Course code FIN 238
  • Semester Fourth Semester
  • Full Marks 100
  • Pass Marks 45
  • Credit 3 hrs
  • Elective/Compulsary Compulsary