25830 Theory of General Insurance

Faculty of Business: Finance and Economics
Credit points: 6 cp

Subject level: Postgraduate

Result Type: Grade and marks

Requisite(s): 25825 Principles of Risk and Insurance AND 25826 Risk Management AND 25829 Property Insurance
These requisites may not apply to students in certain courses.
There are also course requisites for this subject. See access conditions.

Handbook description

This subject develops an understanding of the application of statistical and quantitative methods to the general insurance underwriting process. It identifies both the techniques and issues to be addressed in the management of a general insurance portfolio and the regulatory regime within which such portfolios operate.

Subject objectives/outcomes

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

Understand the application of statistical and quantitative methods to problems in general insurance.
Apply underwriting pricing principles to the sources of general insurance business.
Evaluate the issues and techniques relating insurance organisational management and the management of the portfolio mix and investment strategy.
Understand legal and accounting issues relevant to insurance statutory reporting, the estimation of cost of claims incurred, underwriting capacity and insurer solvency.

Contribution to graduate profile

This 6-credit-point postgraduate subject develops the understanding of the application of statistical and quantitative methods to the range and pricing of general insurance products. The subject brings to students an understanding of the application of underwriting techniques principles from an insurer perspective, the impact of regulatory and financial reporting processes and practices and current trends and issues.

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

Insurance statistics - elements, scope and application
Insurance markets, the insurance cycle, current trends and issues
Insurability of risks and claims provisions – autonomy of action?
Risk premiums, unearned premiums and acquisition costs
Underwriting, profitability, solvency. And investments – underwriting in a volatile environment
An outline of the insurance accounting and financial reporting process.

Assessment

Class Test (Individual)	25%
The class test 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 theory and concepts of general insurance in a practical case study. 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 to 4.

Recommended text(s)

Hossack, L.B., Pollard,J.H.,Zehnwirth,B. (1983), Introductory Statistics with Applications in General Insurance, CUP, Cambridge.

Indicative references

Panjer,H.H., Wilmot,P. (1992) Insurance Risk Models, Society of Actuaries, Schaumburg Ill

Institute of Actuaries of Australia (1995) Actuarial Practice of General Insurance, Institute of Actuaries, Sydney

Lamble, P.J, (1992) Accounting for the General Insurance Industry , AARF, Caulfield.

Straub,E., (1988) Non-Life Insurance Mathematics, Springer-Verlag, New York

Hogg, R. V. et al (1984) Loss Distributions, Klugman

Goovaerts, M.J. et al, (1990) Effective Actuarial Methods, North Holland, Amsterdam

Grandell, J (1991) Aspects of Risk theory, Springer-Verlag, New York.