RISK MANAGEMENT (MOD.I)
The aim of the course is to analyse the risks and the insurance. The first part of the course is related to the identification of risks and their management whereas the central part of the course is devoted to the study of insurance, i.e. the identification of the premium, the insurance management and the process of identification of technical provisions.
At the end, the student will be able to: recognize the risks, identify the most effective risk management technique, and estimate the degree of coverage.
The learning outcomes of the course can be as follows:
Knowledge and understanding: the student has to show of recognizing the risks and of identifying the most effective risk management technique.
Applying knowledge and understanding: the student has to show of applying the knowledge on risks to the main issues related to the risk. At this aim, the professor will show a set of different case studies at the lessons or during the student reception.
Making judgements: the student has to show of estimating the system of risks of firms accounting for the impact of the insurance coverage.
Communication: the student has to be able of correctly use the terminology on risks in order to analyse the answers of the written test and of the oral test.
Lifelong learning skills: the student has to be able to identify the main risks and the main instruments for their management. Furthermore, the student has to deepen the contents of the course through the independent analysis of further bibliographical references.
Basic knowledge of economics of financial intermediaries and corporate finance. For students coming from different first-level degree programs, an integration including a relevant bibliographic reference will be provided.
The risk and its classification. The system of risks and the processes of management and hedging. The insurance premium. The insurance business (collecting of risk exposures, risk management, and lapse management). The undewriting risk and its sub-risks. The operative risk and the enterprise risk. The climate change risk. Solvency II.The content of the course can be divided into several blocks of lessons whose duration depends on the level of preparation of students and their familiarity with the concepts of corporate finance and of financial institutions.
On average, it is possible identify the following modules:
I module – The risks (12 h)
The risks. The non-life business and the life business.
II module – Insurance risks (12 h)
Insurance activity (risk taking, risk management, and risk settlement). The insurance risk and its sub-risks, operational risk.
III module – Financial risks (12 h)
The credit risk and the reinsurance. Investment activity (asset and liability management). Market risk and its components.
IV module – The capital (12 h)
The role of capital and the solvency assessment. Solvency II.
The course includes frontal lessons during which the contents of the program will be discussed and presented some examples of financial and insurance risk management. The teaching material will be downloadable from the Moodle platform, where, in addition to the presentations used during the lessons, it will be possible to find additional material for thematic insights.
- Porzio C., Previati D., Cocozza R., Miani S., Pisani R. (2011) Economia delle imprese assicurative, McGraw-Hill, Milano
- Starita M. G., Malafronte I. (2014) Capital Requirements, Disclosure, and Supervision in the European Insurance Industry. New Challenges towards Solvency II, Palgrave Macmillan, Basingstoke
- Other materials provided by the professor.
The assessment is based on a written examination and on an oral examination.
The written examination consists of five open questions (with a maximum score of 5 points for each answer) and one exercise (with a maximum score of 5 points).
The vote of the oral examination is expressed in scale from 0 to 30, and it is averaged with the vote of written examination (equal weighting) in order to determine the final vote.