RISK MANAGEMENT (MOD.I)
The aim of the course is to analyse the financial and insurance risks as well as risk management tools, addressing solvency assessment issues, in the Solvency II environment. The focus is on the relationship between the risks undertaken by the insurance companies and the capital to meet insurance obligations towards policyholders and beneficiaries of insurance or reinsurance contracts. At the end of the course, the student will be able to: recognize the various risk factors, apply the most appropriate management methodology, and identify the impact on capital.
Expected learning outcomes
Knowledge and understanding: the student should be able to understand the issues related to financial and insurance risks. The student should also know the main methodologies through which it is possible to assess and analyze the risks and their impact on capital.
Applying knowledge and understanding: the student should be able to apply the acquired knowledge to the main risk management issues. To this end, the teacher will discuss and illustrate some different examples and specific cases of risk management policies during the lessons; for non-attending students, assistance time will be provided.
Making judgements: the student should demonstrate the ability to independently assess the risk management issues and identify the effects on the capital taking into account the difference between the interests of the policyholders and of the beneficiaries of insurance contracts and the interests of the insurance company's shareholders or mutual insurers’ members.
Communication: the student should be able to use the terminology of risks to discuss on the main contents of the written examination and of the oral examination.
Lifelong learning skills: the student should be able to show a good learning ability over the main topics and tools for an effective risk management. The student should be able to deepen the basics contents proposed by teacher through an independent analysis of bibliographic 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.
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 (selezione di capitoli).
- 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 material provided by the teacher.
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.