PRINCIPLES & PRACTICE OF INSURANCE AND RISK TRANSFER

SHE Level 2
SCQF Credit Points 20.00
ECTS Credit Points 10.00
Module Code M2N326563
Module Leader Jon McNeill
School Glasgow School for Business and Society
Subject Risk
Trimester
  • A (September start)

Summary of Content

This module will provide students with a critical understanding of insurance theory and its application within a wider context of risk transfer. Exploration of insurance as a risk transfer mechanism necessities consideration of alternative risk transfer mechanisms such as captives, derivatives, catastrophe bonds, securitisation and retention where organisational risk management competencies permit. This will be supported through consideration of contemporary examples to underline how insurance is applied to real world situations in response to traditional and contemporary risk issues. While insurance is undoubtedly global in nature, the focus of this module is predominantly based on UK practice as a leading developed market. However, the application of insurance to other countries is considered through relevant case studies as a way to identify the best practices for future application across the globe. In the process, this module will explore how individual insurers, and the industry more broadly, deal with a shifting landscape to provide coverage for a growing number of emerging, complex and often interconnected risks.

Syllabus

The syllabus is placed in the context of current risk issues and underpinned by insurance theory. 1. Theory and Principles of Insurance 2. The role of insurance in the context of risk retention and financing 3. Forms and types of insurance 4. The law and regulation of insurance 5. The features, operations and placement of reinsurance 6. The fundamentals of pricing and underwriting general and life insurance 7. Strategic management and the marketing and distribution of insurance 8. The nature of insurance claims and the insurance claims process 9. The emerging role of insurance in reputation risk management 10. The role of insurance and alternative risk transfer mechanisms in the management of emerging risks

Learning Outcomes

On successful completion of this module, the student should be able to: 1. Demonstrate a comprehensive and analytical understanding of the theory and principles of insurance2. Critically discuss the role of insurance, risk transfer and risk retention within a wider system of risk management for a modern organisation3. Develop a thorough knowledge of the fundamentals of insurance pricing and underwriting for both general and life insurance4. Evidence an understanding of the role of insurance for addressing a range of risks at micro and macro levels and some of the challenges in achieving this.5. Examine the role of derivatives, catastrophe products and other alternative risk transfer mechanisms in risk management.

Teaching / Learning Strategy

This module is focused on the development of both theoretical and practical business skills and aims to engage students in analysis, research and discussion of contemporary, real life issues relevant to the insurance sector. The dominant form of delivery is through face-to-face contact. This 20 credit module involves 3 hours of class contact per week: a 2 hour lecture and 1 hour seminar. Lectures will highlight the key issues and signpost relevant journal articles and other appropriate literature. Students are expected to prepare for preceding lectures by undertaking relevant reading and preparing responses to questions. The lectures will adopt a variety of teaching styles including seminar style contributions such as group discussion to enhance intellectual, critical and analytical skills. In the case of more applied topics, students will attempt relevant problem or scenario based questions prior to lectures. This will provides the basis for developing professional skills, knowledge and understanding. Seminars are conducted in workshop format providing a mix of tutor led, student led and group learning. Lecture materials and additional reading will be available online through GCU Learn the central repository with which students can access all essential learning material. Also through GCU Learn, students will have the opportunity to engage with each other and discuss the weekly lecture topics online through a combination of Padlet, Wiki's and blogs as appropriate. Formative and summative feedback via. a variety of mechanisms and will be issued within 3 working weeks of submission.

Indicative Reading

Textbooks Thoyts, R. (2010) Insurance theory and practice. Abingdon, Oxon, Routledge. Atkins, D. & Bates, I. (2008), Insurance. Global Professional. Rejda, G. E. (2017) Principles of risk management and insurance. 13th edition. Global edition. Harlow, England: Pearson Education Limited. Skipper, H. D. et al. (2007) Risk management and insurance: perspectives in a global economy. Malden, MA: Blackwell. Banks, E. (2004) Alternative risk transfer integrated risk management through insurance, reinsurance, and the capital markets. Journals Geneva Papers on Risk & Insurance Risk Management and Insurance Review Journal of Insurance Regulation Journal of the Chartered Insurance Institute. Industry Websites The Association of British Insurers - www.abi.org.uk <http://www.abi.org.uk> The Association of Risk Managers (AIRMIC) - <http://www.airmic.com/> The Chartered Insurance Institute: <http://www.cii.co.uk/cii.aspx> Lloyd's of London: <http://www.LLoydsoflondon.co.uk> The Financial Services Authority: <http://www.fsa.gov.uk/> Swiss Re Sigma: <http://www.swissre.com>

Transferrable Skills

By the end of this module students will have gained competence in the following key transferrable areas: -360 Clear communication, in both written and verbal form Independent motivation stemming from the ability to prioritise tasks Research skills in order to complete coursework Time management and meeting deadlines Build team working and empathy through stakeholder based real and hypothetical insurance scenarios

Module Structure

Activity Total Hours
Lectures (FT) 24.00
Seminars (FT) 12.00
Independent Learning (FT) 134.00
Assessment (FT) 30.00

Assessment Methods

Component Duration Weighting Threshold Description
Exam 01 2.00 70.00 35% Unseen exam - Exam Diet Tri A
Course Work 01 n/a 30.00 35% 1 MCQ online test