University of Technology SydneyHandbook 2008

25825 Principles of Risk and Insurance

Faculty of Business: Finance and Economics
Credit points: 3 cp

Subject level: Postgraduate

Result Type: Grade and marks

Handbook description

This subject develops an understanding of the fundamental principles of risk and use of insurance in the management of risk exposures. It directs attention to the insurance process and the regulation of that process.

Subject objectives/outcomes

On completion of this subject, students should be able to:

  1. Understand risk theory and the influence of uncertainty and risk in corporate and other decision-making processes
  2. Understand the role of insurance as a medium for the management of risk
  3. Evaluate the structuring influence in the determination of commercial, economic and social outcomes and the contemporary issues which are confronting the Australian general insurance industry
  4. Understand the legal framework of the insurance contract and the insurance regulatory function.

Contribution to graduate profile

This 3-credit-point postgraduate subject introduces students to the concepts of risk and insurance within a framework relevant to the Australian insurance industry. The subject directs attention to the strategies for the management of risk and the use of the insurance mechanism in this process. Students are introduced to the legal framework within which the insurance contract exists and the regulatory regime within which the Australian insurance industry functions.

Teaching and learning strategies

The subject will be taught in a combined Lecture/Tutorial format with extensive use being made of Case Studies in the issue identification and management processes.

Content

  • An introduction to risk and strategies for the management of risk including the insurance mechanism
  • Insurance in Australia – General and Life Insurance industries and current trends and issues
  • An introduction to underwriting and reinsurance and the changing face of general insurance
  • An introduction to fundamental insurance legal contractual and agency principles, the application of the Insurance Contracts Act. And Insurance Agents and Brokers Act and the impact of recent statutory and interpretative changes
  • An outline of the current regulation of the Australian insurance process
  • An introduction to life insurance and the regulation of the Australian life insurance industry.

Assessment

Class Quiz (Individual)25%
The class quiz is designed to assess students' understanding of the theories and concepts to demonstrate that students have met objective 1.
Case Study (Individual)25%
This will assess students' understanding of the concepts of financial institutions management in a practical assignment. This assignment will allow students to demonstrate that they have met objective 2 and 3.
Final Examination (Individual)50%
This exam will test students' understanding of the theory and their ability to apply the theory. This will enable students to demonstrate that they have met objectives 1-4.

Recommended text(s)

Vaughan, E.J and Vaughan T.M., (1995), Essentials of Insurance: A Risk Management Perspective, John Wiley and Sons Inc., Canada.

Indicative references

Kunreuther, H. H and Freeman P.K., (1997), Insurability of Risks, Fundamentals of Risk Analysis and Risk Management, CRC Press, USA

Mann, P., (1997), Annotated Insurance Acts, LBC Sydney.