Risk Management in Insurance Business
Subject Overview
The fourth Banking and Insurance elective, developing an understanding of risk measurement and transfer in the insurance business — corporate and personal risk management, analytical tools and risk financing/transfer techniques, insurance industry evolution and regulation in India, and insurance pricing, documentation and financial planning. A 4-credit elective theory paper.
Unit-wise Syllabus
4 units — click WhatsApp below to get the full notes for each
Unit 1: Risk concepts and demand for insurance
Concept of risk, corporate and personal risk management, types of risk, risk identification and measurement, pooling and diversification, risk aversion and demand for insurance by individuals and corporations, insurability of risk, loss control, risk retention and reduction decisions
Unit 2: Risk perception and financing techniques
Analytical tools for corporate risk management, products liability, environmental liability, directors and officers liability, techniques of risk financing — retention, captive insurance companies, types of risk transfer, benefits and limitations of insurance
Unit 3: Insurance industry and regulation in India
Purpose, need and principles of insurance, kinds of insurance, costs and benefits, evolution of India's insurance industry, Malhotra Committee Report, legislative framework — Insurance Act 1938, LIC Act 1956, privatization, IRDA, government policy
Unit 4: Insurance pricing and financial planning
Saving and investment policies of insurance companies, tax benefits under insurance policies, premium computation, rider premium, bonuses, surrender and paid-up value, insurance documents (proposal forms, premium receipts, policy contracts, endorsements), reinsurance and bancassurance concepts