1110 Fin3119 Risk and Insurance

Dr. Chen Renbao

R&I

Course Outline

NATIONAL UNIVERSITY OF SINGAPORE NUS BUSINESS SCHOOL

 FIN3119  FIN3119:: R ISK AND I   NSURAN  NSURANCE CE

LECTURE NOTES

by

A/P CHEN RENBAO

2011/2012 SEMESTER I

1

Dr. Chen Renbao

R&I

2

Course Outline

NATIONAL UNIVERSITY OF SINGAPORE NUS BUSINESS SCHOOL Course:

FIN3119: Risk and Insurance 2011/2012 Semester I

Lecturer:

A/P Chen Renbao Office: #07-05 Email: [email protected]

Class Hours:

Monday: 12:00-15:00 (BIZ 1 /2-1) Tuesday: 12:00-15:00 (BIZ 1 /2-1)

Tel: 6516-3188

Consultation Hours: Monday: 15:00-18:00 and Tuesday: 15:00-18:00 Other time by appointment Course Description: Business entities and individuals are exposed to substantial risk associated with losses to property, income, and wealth because damage to assets, legal liability, disability, retirement, and death. Costs associated with legal liability and employee benefit programs, particularly Central Provident Fund (CPF) and health care, have become matters of deep concern to company management. Individuals seeking coverage of their professional and personal risks have similar concerns. This survey course analyses the nature and impact of these risks and discusses appropriate risk management techniques. The emphasis is on the analysis and management of  these problems for business entities, but these are substantial implications for the problems faced by individuals and society. Specific topics include risk identification and measurement; risk  control and transfer, risk financing with commercial insurance, self-insurance, and captive insurance programs; insurance markets and regulation; employee benefits and CPF; life and health insurance; personal financial planning; international risk management and insurance for multi-national corporations.

This course will introduce Singapore experiences in solving problems related to Medicare, Housing, aging population and retirement, transportation, and using effective tax system to encourage people to work harder as well as help the poor. Course Objective: It is an introductory course to insurance. No pre-requirement is needed for this course. After completion of this course, the students are expected to understand the basics of risk management and insurance, and importantly to explain the risk management and insurance decisions made by individual and household, company, and the government. Basic Reference Text: Rejda, Geroge E., Principles of Risk Management and Insurance (11th edition, 2011). Assessment Methods: Final Examination Mid-term Project Report Class participation

50% 30% 15% 5%

Requirements of Project: This is a group project. You can choose any topic related to this course. The length is between 15 to 20 pages without including references and tables and graphs.

Dr. Chen Renbao

R&I

3

Course Outline

Course Outline:

Monday Class 12:00-15:00 BIZ 1 /2-1 Topic #

Date

Topic Title

Assignments

Part I: Risk Management & Insurance Basics 1

8/8

Orientation and Course Overview; Risk and Risk Management I Risk and Risk Management II, Cases 1, 2; Risk Pooling and Law of Large Numbers The Insurance Mechanism; Risk and Utility Corporate Demand for Insurance

Ch. 1 HO1 Ch. 3, Ch. 4 Ch 2 Appendix Ch. 2 HO2 HO3

2

15/8

3

22/8

4

29/8

5

5/9

Organisational Structure in the Insurance Firm; Insurance Company Operations, Reinsurance

Ch. 24-26; HO4 HO5

6

12/9

Insurance Pricing Recess Week 17/9-25/9

Ch. 26; Ch 18 Appendix

7

26/9

Insurance Contract and Insurance Regulations

Ch. 6, 27 HO6

Part II: Insurance Market

8 9

3/10 10/10

10

17/10

11

24/10

12 13

31/10 7/11

14

14/11

15

Motor Insurance and COE  Mid-term Exam (Topics: 1-7); Other General Insurance; Liability Insurance Life Insurance; Health Insurance

Ch 10-11; HO7 Ch 8-9, 12, 7, 13-14; HO8, HO9, HO9a Ch.16-20; HO10, HO11, HO12

Employee Benefit Planning and Retirement Planning  Hand in Project Report Overview of Personal Financial Planning Risk Management and Insurance for Multi-national Corporation Reading Week 

Ch. 21-23; HO13, HO14, HO15,

Final Exam to be confirmed

HO16, HO17 6/11 Hari Raya Haji

Dr. Chen Renbao

R&I

4

Course Outline

Tuesday Class 12:00-15:00 BIZ 1 /2-1 No Class on 9/8 and 30/8 Topic #

Date

Topic Title

Assignments

Part I: Risk Management & Insurance Basics 1

16/8

Orientation and Course Overview; Risk and Risk Management I Risk and Risk Management II, Cases 1, 2; Risk Pooling and Law of Large Numbers No Class on 30 August The Insurance Mechanism; Risk and Utility

Ch. 1 HO1 Ch. 3, Ch. 4 Ch 2 Appendix

2

23/8

3

Make-up

4

Make-up

Corporate Demand for Insurance

HO3

5

6/9

Organisational Structure in the Insurance Firm; Insurance Company Operations, Reinsurance

Ch. 24-26; HO4 HO5

6

13/9

Insurance Pricing Recess Week 17/9-25/9

Ch. 26; Ch 18 Appendix

7

27/9

Insurance Contract and Insurance Regulations

Ch. 6, 27 HO6

Ch. 2 HO2

Part II: Insurance Market

8 9

4/10 11/10

10

18/10

11

25/10

12 13

1/11 8/11

14

15/11

15

Motor Insurance and COE  Mid-term Exam (Topics: 1-7); Other General Insurance; Liability Insurance Life Insurance; Health Insurance

Ch 10-11; HO7 Ch 8-9, 12, 7, 13-14; HO8, HO9, HO9a Ch.16-20; HO10, HO11, HO12

Employee Benefit Planning and Retirement Planning  Hand in Project Report Overview of Personal Financial Planning Risk Management and Insurance for Multi-national Corporation Reading Week 

Ch. 21-23; HO13, HO14, HO15,

Final Exam to be confirmed

HO16, HO17 6/11 Hari Raya Haji

Dr. Chen Renbao

R&I

Course Outline

5

Other Recommended Readings for FNA3119

1

Triechmann, James, Robert Hoyt and David Sommer, 2005,  Risk Management and  th  Insurance (12 Edition), Thomson South-Weston.

2

Jack V. Michaels, 2006, Technical Risk Management , Prentice Hall.

3

Doherty, Neil A., 1985, Corporate Risk Management: A Financial Exposition , McGraw-Hill, Inc.

4

Trieschmann, James S. and Sandra G. Gustavson, 1995,  Risk Management and   Insurance (9th ed.), South-Western College Publishing.

5

Williams, C. Arthur, Michael L. Smith, and Peter C. Young, 1995, Risk Management  and Insurance (7th ed.), McGraw-Hill Inc.

6

Black, Kenneth, and Harold Skipper, 2000,  Life and Health Insurance (13th ed.), Prentice Hall.

7

Koh Seng Kee and Fonf Wai Mun, 1999, Personal Financial Planning, Prentice Hall.

8

Rosenbloom, Jerry and Victor Hallman, 2000,  Employee Benefit Planning (6th ed.), Prentice Hall. Please come to my office (BIZ1 02-18) for these books.