25717 Insurance Risk Financing

Subject level: Postgraduate

Handbook description

This subject develops an understanding of contemporary risk financing techniques available to both insurers and insureds. It directs attention to the extent to which these alternative risk-financing techniques are structuring ongoing insurance relationships.

Subject objectives/outcomes

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

1. Understand the use of alternative risk financing techniques by both Insurer and Insured.
2. Analyse the technical and theoretical issues involved in these processes.
3. Understand the extent to which these alternative risk-financing strategies are structuring contemporary perceptions of risk and insurance.

Contribution to graduate profile

This 6-credit-point postgraduate subject introduces students to the contemporary issues arising from the use of alternative risk financing techniques by both Insureds and Insurers. Students will be provided with an understanding of the extent to which the use of alternative risk financing opportunities is structuring the future direction of the insurance process.

Emphasis is upon the use of alternative risk financing strategies for not only those natural perils that are commonly regarded as being commercially insurable risks, but also those existing and emerging risk exposures for which commercial insurance may be neither available nor viable in the longer term without major changes occurring in the insurance arena.

Content

• Emerging alternative risk financing strategies.
• Convergence of the insurance industry and capital markets.
• Rating, indices and catastrophe models.
• Securitisation, operational, legal and tax treatment of securitisation.
• Insurance and weather derivatives, scope, application and modeling – Chaos Theory.

Assessment

Assessment item 1: Class Test (Individual)

Assessment item 2: Assignment and Case Study (Individual)

Assessment item 3: Final Exam (Individual)