BPF_ARMI Risk Management and Insurance

Faculty of Economics and Administration
Autumn 2022
Extent and Intensity
2/2/0. 6 credit(s). Type of Completion: zk (examination).
Teacher(s)
doc. Ing. Eva Vávrová, Ph.D. (lecturer)
Oleg Deev, Ph.D. (lecturer)
Ing. Mgr. Martin Stachoň, Ph.D. (seminar tutor)
Guaranteed by
doc. Ing. Eva Vávrová, Ph.D.
Department of Finance – Faculty of Economics and Administration
Contact Person: Mgr. Jana Nesvadbová
Supplier department: Department of Finance – Faculty of Economics and Administration
Timetable
Tue 10:00–11:50 S309, except Tue 13. 9., except Tue 1. 11.
  • Timetable of Seminar Groups:
BPF_ARMI/01: Tue 12:00–13:50 S309, except Tue 13. 9., except Tue 1. 11., M. Stachoň
Course Enrolment Limitations
The course is also offered to the students of the fields other than those the course is directly associated with.
The capacity limit for the course is 25 student(s).
Current registration and enrolment status: enrolled: 1/25, only registered: 0/25, only registered with preference (fields directly associated with the programme): 0/25
fields of study / plans the course is directly associated with
Course objectives
The main objective of the course is to introduce students to basic principles of risk and insurance prevalent in financial decision making. By examining the nature of risk and how it can be managed, insurance is seen as one of the main tools used to respond and manage risks. The course is designed to address basic principles of risk management and major forms of insurance, insurance delivery systems as well as insurance company operations. Legal principles related to insurance and insurance contracts will be also considered. As an introductory course, students will become familiar with a number of concepts, programs and insurance policies found in personal and business applications.
Learning outcomes
After successful completion of the course, students should be able to:
- outline the risks associated with loss of income, ownership of property and legal liability;
- comprehend basic concepts of risk and uncertainty as they relate to insurance;
- classify the various types of insurance, which are used to reduce the chance of loss and identify other loss prevention/reductions mechanisms, which may be appropriate;
- define methods of risk management found in strategic planning and match it with appropriate risk;
- understand the legal and market environment of the insurance industry;
- comprehend characteristics of the following types of insurance: property/liability, automobile, life and health insurance;
- identify appropriate insurance coverage for specific personal and business situations.
Syllabus
  • 1. Course introduction and overview. The problem of risk. Definitions of risk. Uncertainty, peril, hazard and risk. Risk classifications. Risk perceptions and reactions.
  • 2. Risk management basics. Risk identification, assessment and pooling. Risk handling techniques: loss control, risk transfer, loss financing, diversification and hedging. Enterprise risk management framework.
  • 3. Basic statistical concepts in risk management and insurance. Expected value and average loss. Law of large numbers. Probability distributions.
  • 4. Insurance as a risk management tool. The nature and functions of insurance. Insurable loss exposures. Types of insurance.
  • 5. Insurance markets: economics and issues. Introduction to economic theory of insurance markets. Demand and supply of insurance. Principles of insurance regulation.
  • 6. Insurance industry. Classification of insurers. Insurance marketing. Competition and cooperation in the insurance industry.
  • 7. Introduction to insurance company management. Basic concepts of ratemaking. Underwriting and claims settlement. Insurer's investment activities. Reinsurance. Financial aspects of insurer operations.
  • 8. Insurance contracts. Requirement of a valid insurance contract. Legal principles and characteristics of insurance contracts. Basic parts of an insurance contract.
  • 9. Life insurance and annuities. The actuarial basis of life insurance. Standard life insurance contract provisions and options. The annuity concept and classification. Social insurance.
  • 10. Homeowners insurance. General provisions and forms. Insurance coverage plans. Commercial property insurance.
  • 11. Negligence and legal liability. General liability insurance for the individual. Commercial liability insurance.
  • 12. Vehicle insurance. Personal auto policy and liability coverage.
Literature
    required literature
  • REJDA, George E. and Michael J. MCNAMARA. Principles of risk management and insurance. Global edition. Harlow: Pearson, 2017, 720 stran. ISBN 9781292151038. info
  • SKIPPER, Harold D. and W. Jean KWON. Risk management and insurance : perspectives in a global economy. 1st ed. Malden, Ma: Blackwell, 2007, xv, 751. ISBN 9781405125413. info
    recommended literature
  • ZWEIFEL, Peter and Roland EISEN. Insurance economics. Heidelberg: Springer, 2012, xvi, 451. ISBN 9783642205477. info
Teaching methods
The course is taught in lectures and seminars, which include class discussions and require active participation. Problem sets and consulting cases are solved in seminars. Report improves the ability of students to summarize a certain issue in the field of risk management and insurance and discuss it critically. Readings serve to broaden and deepen the spectrum of knowledge students acquire during the lectures.
Assessment methods
For the successful completion of the course students are required: to take a written exam, make one class presentation on the given topic and submit one individual project - a property risk assessment report with insurance coverage suggestions (by the end of week 11). Property risk assessment reports mainly analyze possible perils and risks for a specific personal or business immovable property. The report should also contain detailed suggestions and recommendations for property risk management and insurance coverage. The suggestions should be reasonable and justified. Each student will prepare a 4-pages report on a chosen estate. Students should use qualitative and quantitative methods to support conclusions in the report based on the data and information collected from property owners and insurance companies.

Following is the scale that will be used to evaluate your performance in this class:
- one report write-up (up to 5 grade points),
- one seminar presentation on the specific topic (up to 5 grade points),
- active participation in the class (up to 6 grade points),
- final exam (up to 20 grade points).

The exam will be cumulative on the material from the entire course. Students will not be allowed to take an exam without submitting a report with all the requirements fulfilled. Active participation in class means that student is actively watching, listening and answering questions as the lecture or seminar progresses. Student also tries to solve the suggested example problems as the lecture/seminar proceeds and proves that he/she has learned the material by answering the related questions and working the related problems incorporated in the summative assessment. Participation quality (thoughtfulness of comments or questions) is valued more than participation quantity (frequency of comments/ questions).
Language of instruction
English
Further comments (probably available only in Czech)
Study Materials
The course is taught annually.
Teacher's information
Final grades would be given according to the following grading scale:

A = 28-30+; B = 26-27; C = 23-25; D = 21-22; E = 18-20; F = below 18. Plus/minus grading at student’s request will not be used in this course.

Students in this course are expected to adhere to the Masaryk University’s high standards of integrity as spelled out in the Disciplinary Code for Students and Directive N.3/2008. Anyone who cheats on exams, or who submits essay that is not their own, will be subject to the penalties set forth in the Code. Any copying, recording or leaking tests, use of unauthorized tools, aids and communication devices, or other disruptions of objectivity of exams will be considered non-compliance with the conditions for course completion as well as a severe violation of the study rules. Consequently, the teacher will finish the exam by awarding grade "F" in the Information System, and the Dean will initiate disciplinary proceedings that may result in study termination.

The course is also listed under the following terms Spring 2016, Spring 2017, Spring 2018, Spring 2019, Spring 2020, Spring 2021, Autumn 2021, Autumn 2023, Autumn 2024.
  • Enrolment Statistics (Autumn 2022, recent)
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