Prince Sultan University

College of Business Administration

COURSE OUTLINE

Course Code : Fin 330 Pre-requisite: Fin 301

Course Title : Principles of Insurance Dr. Mohammad Hanif Akhtar

Credit Hours : 3

I. Course Description:

This course covers the basic concepts in risk management and insurance to hedge against the risks faced by individuals, businesses and insurance industry. It further explains the principles of individual life insurance and other major insurance programs like automobile insurance, homeowners insurance and health insurance programs. Coverage is also given to the issue of regulation in insurance industry. The subject also deals with the nature and treatment of insurable risks, insurance contracts and related issues.

II. Course Objectives: Having read this course, the students are expected to have a better understanding of the basic insurance terminology and common insurance policies. They will be able to learn about the various dynamics of insurance industry, underwriting process and types of insurance e.g. life insurance, auto insurance etc. The course is also expected to enable them understand insurance as a method to hedge against the risk.

Knowledge
Explain the various insurance fundamentals as an instrument to analyze and understand the concepts and issues in insurance industry.
Cognitive Skills
To enable the students to have an improved understanding of mechanics in the areas of liability, life and health insurance based on application of theory to the real life situations.
Interpersonal Skills & Responsibility
Recognize the value judgment process and diversity of opinion regarding issues across individuals to develop and strengthen the mind-sets towards mutual understanding, tolerance and ideas sharing.
Draw upon the resiliency of human approach and adopt a productive and supportive attitude in solution of problems in various types of insurance.
Numerical & Communication Skills
Put forward individual opinions and observations about theoretical and contemporary issues the various fields of insurance. Learn about calculations of premiums and loss payments methods.

III. Course Contents

Topics / No. of Weeks / Contact Hours
A.  Risk; its Treatment, Insurance & Risk
-  Meaning, Basic Categories of Risk
-  Chance of Loss, Peril and Hazard
-  Types of Pure Risks
-  Methods of Handling Risk.
-  Insurance and its features
-  Requirements of an Insurable Risk
-  Insurance Distinguished from Other Transactions
-  Types of Insurance, Social Benefits and Costs of Insurance
(Ch_1 and 2) / Week 1-2 / 6 hours
B.  Risk Management
-  Meaning of Risk Management
-  Objectives of Risk Management
-  Risk Management Process
-  The Changing Scope of Risk Management
-  Insurance Market Dynamics
-  Loss Forecasting
-  Financial Analysis in Risk Management Decision Making
(Ch_ 3 and 4) / Week 3-4 / 6 hours
C.  Insurance Company operations
-  Rating and Ratemaking
-  Underwriting and Production
-  Claims settlement
-  Reinsurance
-  Alternatives to Traditional Reinsurance
-  Investments & Other Insurance Function
(Ch_ 6) / Week 5 / 3 hours
D.  Financial Operations of Insurers
-  Property and Casualty Insurers
-  Life Insurance Companies
-  Ratemaking in Property and Casualty Insurance
-  Ratemaking in Life Insurance
(Ch_ 7) / Week 6-7 / 6 hours
E.  Legal Principles and Analysis of Insurance Contracts
-  Principles of Insurance
-  Requirements of an Insurance Contract
-  Legal Characteristics
-  Basic Parts of an Insurance Contract
-  Insured, Endorsements and Riders
-  Deductibles, Coinsurance , Other Insurance Provisions
(Ch_9 and 10) / Week 8-9 / 6 hours
F.  Life Insurance
-  Premature Death, Financial Impact across families
-  Amount of Life Insurance to Own
-  Methods for Protection
-  Types of Life Insurance Policies
-  Variations of Whole Life Insurance
(Ch_11) / Week 10-11 / 6 hours
G.  Life Insurance Contract Provisions
-  Life Insurance contractual Provisions
-  Dividend Options
-  Nonforfeiture Options
-  Settlement Options
-  Additional Life insurance benefits
(Ch_12) / Week 12-13 / 6 hours
H.  Buying Life Insurance
-  Determining the cost of Life Insurance
-  Rate of return on saving component
-  Shopping for Life Insurance
(Ch_13) / Week 14 / 3 hours
I.  Takaful: An Alternative to Conventional Insurance.
-  Introduction.
-  The Sharī´ah Basis of Takaful.
-  Takaful and Conventional Insurance Compared.
-  Models of Takaful
(Ch_to be provided) / Week 15 / 3 hours

IV. Course Components

Component / Contact Hours
Lecture / 45 hours

V. Teaching Strategies

Domain / Strategy
Knowledge / Lectures and Theoretical Discussions
Cognitive Skills / Case analysis
Interpersonal Skills & Responsibility / Group presentations, Plenary discussions,
Numerical & Communication Skills / Individual presentations and assignments

VI. Course Requirements

-  Preliminary and Final Examinations

-  Class participation in discussions and attendance

-  Participation in individual and group activities

-  Oral and written tests (quizzes, take-home assignment)

- 

VII. Student Assessment

A. Assessment Task

Domain / Assessment Task
Knowledge / Quizzes and class discussions
Cognitive Skills / Examinations – essay type, MCQs, case analysis
Interpersonal Skills & Responsibility / Group project and critical analyses
Numerical & Communication Skills / Written assignments and presentations

B. Schedule of Assessment

Assessment / Assessment Task / Week Due / Proportion of Final Assessment
1.  / Quizzes / Week 3 and 9 / 8%
2.  / Class Discussion/Participation / On-going / 6%
3.  / Mid-term Examinations / Week 6 & 11 / 40%
4.  / Home works/class works / On-going / 6%
5.  / Final Examination / Week 16/17 / 40%

VIII. Learning Resources

A.  Main Sources:

George E. Rejda (2014) Principles of Risk Management and Insurance, 12th Edition; Boston: Pearson/Addison-Wesley.

Other Resource Materials:

1.  Mark S. Dorfman (2008) Introduction to Risk Management and Insurance. Ninth Edition, Pearson International edition, Pearson Education,

ISBN-10: 0132242273|ISBN-13: 9780132242271.

2.  Scott E. Harrington and Gregory R. Niehaus; Risk Management and Insurance, International Edition (2004); Irwin/McGraw-Hill.

3.  William, C. Arthur, Jr. Michael, L. Smith and Peter, C. Young (1998) Risk Management and Insurance, 8th Edition; Boston, MA: Irwin/McGraw-Hill.

4.  Journal of Risk and Insurance

5.  Risk Management Insurance Review

6.  Risk analysis

Electronic Materials, Web Sites etc

1.  www.iii.org

2.  www.sra.com

3.  www.insure.com

4.  www.insurancejournal.com

5.  www.riskinstitute.com

B.  Facilities Required

1.  Lecture room

2.  Multimedia with PC

3.  Whiteboard

Note: Dear Students:

1.  You can achieve a very good grade in this course by studying the book on a regular basis, attending classes frequently and by revising always whatever is done in the class.

2.  You will get a DN, once your level of absence reaches 13.

5