NBS8248 : Risk and Insurance (2009)
| Semester 1 | 10 Credits |
| Semester 2 | 10 Credits |
| ECTS Credit Value | 10.0 |
Summary
On completion of this module, students will have been introduced to the underlying principles of life and non-life insurance and their uses for controlling risk. The module covers the areas of life insurance and financial planning, underwriting and selection, mortality trends, general insurance, reinsurance and reserving. The module takes a practical approach and illustrates theoretical principles with examples drawn from actual practice throughout. After completing the module students will be well positioned to enter into a wide variety of interesting careers in this area of financial services which is large, expected to exhibit high long term worldwide growth and is robust to short term economic fluctuations.
Aims
On completion of this module, students should be able to understand the underlying principles of life and non-life insurance. It covers the areas of life insurance and financial planning, underwriting and selection, mortality trends, general insurance, reinsurance and reserving.
Outline Of Syllabus
Lecture
Content
1 Course Introduction
2 Life Insurance
Personal financial planning, life insurance products.
3 Pensions
Methods of securing retirement income adopted by different nations
4 Regulation
The regulation of the sale of retail financial services products
5 Mortality
Mortality tables, trends in mortality, underwriting and selection.
6 Life Insurance Mathematics
Mathematical models of the main policy types.
7 Life Insurance Costing and Reserving
Costing policies, setting reserves for policies.
8 General Insurance
Evaluation of the characteristics of general insurance policies.
9 General Insurance
Evaluation of the characteristics of claims from general insurance policies.
10 General Insurance Costing
Mathematical methods for costing general insurance policies.
11 Reinsurance
The main forms of reinsurance – treaty, excess of loss, catastrophe.
12
Practical Issues in Costing and Reinsurance
Introduction to key practical issues via case studies.
13
General Insurance Reserving
Methods of calculating appropriate reserves
14 Course Review
Intended Knowledge Outcomes
On completion of this module students should be able to:
• Demonstrate a critical understanding of the salient issues relating to life insurance, health insurance and pension products and their use in personal financial planning. In particular the following issues will be covered:
a. the benefits and possible disadvantages of different methods of regulating the sale of retail financial services products.
b. underwriting and selection in life insurance.
c. the main factors affecting trends in mortality.
d. the fundamentals of life insurance mathematics including costing and reserving allowing students to evaluate problems in the area.
• Demonstrate a deep understanding of the different pensions systems being used worldwide.
• Demonstrate a critical understanding of the salient issues relating to non-life (general) insurance. In particular the following issues will be covered:
• the evaluation of the characteristics of general insurance policies.
• the fundamentals of general insurance costing allowing students to evaluate problems in this area.
• the main forms of reinsurance enabling students to make appropriate recommendations regarding the use of reinsurance.
• the need for general insurance companies to hold appropriate reserves and the problems relating to evaluating appropriate reserves.
Intended Skill Outcomes
Students will have the skills to evaluate insurance products and the use of both life and non-life insurance to manage risk for a variety of parties and situations.
They will be able to undertake the calculation of appropriate insurance premiums for a variety of life and non-life insurance products.
They will also be able to construct reinsurance and reserving policies for insurers.
Teaching Rationale And Relationships
The lectures will enable the main conceptual and factual elements of the module to be presented efficiently to the students.
The seminars will give the students to practice problem solving skills in relationship to the material they have learned. They will also be improving their interpersonal communication, teamwork and planning and organisation by engaging in a variety of teamwork exercises.
Reading List
- Fundamentals of Risk and Insurance (2003), Ninth Edition, Wiley (Essential reading)
Author: Emmett J. Vaughan and Therese Vaughan
ISBN: 0-471-21687-9
Staff
| Prof. Robert Hudson |
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