Feel free to contact us. In insurance risk refers to any possibility of loss or any other adverse event with a potential to interfere with organization ability to fulfill its mandate and which will call for submission of insurance claim. (ii) Covering Larger Risks with small capital: Every businessman is always worried about the security of his business. Risk Management Notes (MBA, BBA, B.Com, Management) for mba, bba, b.com and other management and business studies students. They know only one thing that paying premium is compulsory for them. This second chapter on risk management covers some advanced risk management topics. StudySoup has hundreds of Risk Management And Insurance notes, flashcards, study guides, practice exams and more. 3. Risk Management is beneficial to both firms and society It enables the firm to attain its pre-loss and post-loss objectives more easily Risk Management Techniques include: avoid, retain, transfer (insurance, other) and control A risk management program can reduce a firmʼs cost of risk “Risk Management” (4th ed). Nobody knows what is going to happen in next moment. of Exposure units - Define and Measurable (Calculable ) Loss - Determinable Probability Distribution - Random loss - Premium should be Economically Feasible Principles of Insurance - Indemnity (reimbursement of loss) - Utmost Good Faith - Subrogation (To substitute) - Contribution - Insurable Interest Kind of Insurance Life Insurance - Term Insurance (Pure risk coverage … Essays, Research Papers and Articles on Business Management, Risk Retention in Insurance: Meaning and Types, Risk in Insurance: Meaning, Types and Its Transfer, Notes on Money Market: Meaning, Functions and Benefits, Notes on Depositing Cash or a Cheque in Your Bank Account. A Stable, Sustainable Career. It is the process that identifies loss exposures faced by the organization and selects the most appropriate techniques for treating such exposures. Introduction . Insurance provides facility of financial help in case of contingency. In view of the above discussion it is apparent that seeking an insurance cover is to transfer the risk from oneself to the insurance company. One can easily differentiate these characters of insurance as below: 1. Courses offer a framework of knowledge including an introduction to the insurance industry, risk management, principles of property and liability insurance, health, life, personal, and commercial insurance. The need of insurance is well felt when one has to bear the losses from his own pocket. Today the life insurance does not cover the risk of life only but also provides many added benefits also in the field of saving and investments. In case of survival the insurer has to pay after the expiry of a certain period in case of life insurance or to indemnify the insured party on happening of an uncertain event in case of general insurance. We are dedicated to continuous improvement, professionalism and the highest ethical standards in the industry. Other : risk management and insurance 0 Comments Read through the Hidden Valley Inn case information, finish parts in "RMIN case project" that highlighted in yellow: RISK IDENTIFICATION AND VALUATION(identify specific exposures in Hidden Valley Inn based on supporting information, evaluating the risks) -liability exposure identify of products… (ii) It is one of sources to earn Foreign Exchange: The business of insurance has crossed the national borders of any country. The Insurance policies whether life insurance or general insurance are purchased by lacs of people. Prohibited Content 3. Thank you so much! A common man would like to keep secure his small earnings as secured. Durban, South Africa: Heinemann. After reading this article you will learn about:- 1. The school’s Risk Management and Insurance Society is the oldest collegiate risk management society in the country, and its RMI network has more than 2,200 alumni. 4. & du Toit, G.S (2010). Image Guidelines 4. Only the time of the death is uncertain. Insurance and Risk Management. It is therefore can also be said as risk management tool for unfortunate events like death, accident, disability, sickness and retirement. Risk management is the practice of identifying the risks that affect a company's business, and finding ways to mitigate and offset those risks. For any insurances contract not only premium is charged but it also obligatory to pay the premium in time. INSURANCE AND RISK MANAGEMENT (FIN2101) SCHOOL OF BUSINESS (Trimester 3) ASSIGNMENT TWO … Whether it is a fire, a car wreck, illness or a death, the financial consequences can be devastating if you are uninsured. It therefore becomes prudential to get insured for visual or un-visual events one is able to foresee. A very rich may like insurance of his property and his wealth. Bibliography. In Insurance and Risk Management, you are taught the theory of managing risk, short-term insurance, understanding insurance contracts and products, life insurance, retirement funding and health insurance. It’s not as expensive as you might think: Insurance plans can seem expensive, but there are always ways to save money, like bundling different types of insurance together for example. Insurance and Risk Management Specialists Clear Risk Solutions is more than a standard insurance provider; we are an industry leader in both insurance and risk management services and solutions. While traveling by Air one needs aviation insurance. In order to protect against such losses one has to bear some financial burden also. into the mix and it becomes very clear that insurance is still very necessary! Either one bears all such expenses from his pocket or gets these reimbursed from the insurance company is matter of fact that insurance cover has become a need of the day. It is contract by which underwriters engage to indemnify the owner of a ship, cargo or fright against losses from certain perils or sea risks to which their ship or cargo may be exposed. While on board at sea whether humans or cargo it needs marine insurance which is also spread over across the boarders of any country. Module 2Risk Management and Insurance. Submit a copy of the agency’s Note 17 from its published AFR through the ONDSS web application. 2. Insurance contract is one that provides benefits to both the insurer as well as insured. All other contracts are based on present day situation whereas an insurance contract is one for compensating future losses. Economic risk (which we will refer to simply as risk) is the possibility of losing economic security. Payment to insured in the event of loss as per the agreement and terms of policy purchased by the insured. In other word lacs of people contribute towards insurance and only a few people need its cover. It is a good source of earning foreign exchange for any country. The chapter discusses the evolution of corporate risk management to include financial risks and all risks facing the business. Risk is also the subject matter of an insurance contract (for example, the insured property or liability exposure). A Stable, Sustainable Career. In simple words the insurance has become an international business and is necessary also. StudySoup has hundreds of Risk Management And Insurance notes, flashcards, study guides, practice exams and more. The adverse effects of risk can be objective or quantifiable, like insurance premiums and claims costs. Risk management, Insurance and importance of insurance Risk Management (source:ssrma.org) Risk management is an emerging concept in modern business. This assuages the businessman from security investments for a small amount of premium against larger losses. Insurance coverage, if available, is too expensive. • Select the appropriate combination of techniques for treating the loss exposures • Implement and monitor the risk management … MBA Projects for Insurance & Risk Management - MBA in Risk and Insurance management is a 2-year postgraduate Banking and Insurance course, the base qualification is Graduation from a perceived school or its comparable test. It is pertinent to note that the functions of any insurance remained confined to the terms and conditions of different type of insurance policies. By learning about and using these tools, crop and livestock producers can build the confidence needed to deal with risk and exciting opportunities of the future. When pocket does not allow to bear the expenses incurred on losses the insurance come to rescue. “Risk Management” (4th ed). It being an international business any country is free to earn foreign exchange as much as per the polices of insurance devised in a way to attract more and more foreign business. Everyone knows that there is no substitute in case of death of an earning member of the family and no compensation is able to fulfil the gap in case of death of the earning member. Insurance is the way that companies and individuals protect themselves against the risk of loss, and loss itself. Unless we are insured we remain uncertain about our capability to meet the future risks. NotesByRwubahukaJeanClaude,MBA-IB,MSc.Fin.&Bank,BBAFin.E:rwubahukajc@gmail.com,T:0788427626,Website:www.de250.com. Risk management tools and techniques help corporations deal … Most economic risk derives from variation from the expected outcome. Develop a fundamental understanding of auto and homeowners’ insurance policies. Risk management is the practice of identifying the risks that affect a company's business, and finding ways to mitigate and offset those risks. The fact is otherwise true. 4. The risk management process undertakes a best practices approach and focuses on understanding the key risks and managing them within acceptable levels. No insurance can arrest the risk from taking place, no insurance can prevent future miss happenings, but can certainly provide some cover for the losses of risk. Not only savings but such funds collected by insurance companies are further invested to the benefit of insured. This element of unknown situation always hounds around the mind of a person and keeps him worried to think as to what will happen in future in case of any mishappening. * Reduces the hassle and stress of your student life. It is not certain that an accident is going to happen even than a preventive measure is adopted. 2. Designing and building a risk management process around the six rules of risk management will pay huge dividends by preventing incidents while containing those that do happen, and then providing risk financing though insurance. By nature insurance is a devise of sharing risk by large number of people among the few who are exposed to risk by one or the other reason. Governance and Enterprise Risk Management Framework . Life of everyone is full uncertainties. Risks may be divided into three tiers. For example while driving a two wheeler we use helmets only because we take preventive measures to avoid any accidental loss. It is the process that identifies loss exposures faced by the organization and selects the most appropriate techniques for treating such exposures. Effective risk management has reduced the risk. Insurance is a policy regulated under laws and therefore the amount of insurance can neither be paid as gambling nor as charity. Become familiar with the four steps of the risk management process. But all of them are not subjected to losses every year. In real terms Insurance is a protective cover against economic loss by sharing the risk with others, (the pooling members). Report a Violation 11. SUMMARY of Chapter 3- Risk Management is beneficial to both firms and society It enables the firm to attain its pre-loss and post-loss objectives more easily Large firms with many facilities often find a particular kind of risk assumption, called self-insurance, a … If a large number of subscribers to insurance serve the purpose of compensation to few among them exposed to uncertain risks appears as a co-operative look. Flew past every time using these notes! Insurance and Risk Management Services is a relationship-driven organization existing to protect our clients’ financial interests by providing comprehensive risk management services. One cannot expect more than what one has insured himself. Set work: Valsmakis, A.C., Vivian, R.W. Risk is what makes it . The insurer company is engaged in the business of selling the insurance, (willing to accept the risk) the person desirous of purchasing the insurance (willing to transfer the risks). It is only a few or negligible who become victim of some miss happenings. Risk is defined as uncertainty of loss, chance of loss or the variance of actual from expected results. Credit insurance means of insuring the payment of commercial debts against the risk of non-payment by the borrower because of his insolvency or for some other reason. Accidents happen to everyone, but there are people who cause accidents through negligence, a drunk driver for example. Set work: Valsmakis, A.C., Vivian, R.W. risk management tools ready to be used and new tools are always being developed. Functions of Risk Management: (1) Developing specifications for the coverage: Risk management develop the specification for the coverage of loss or damages by a particular peril. Account Disable 12. Harrington/Niehaus' Risk Management and Insurance 2e is written to take the next step offering the essential aspects of insurance contracts and the insurance industry while providing a substantially more conceptual analysis and attention to business risk management and public policy issues that exists in … Every insurance policy is subject to the terms and conditions contained in the insurance agreement and therefore any insurance serves a limited purpose as agreed to between two parties the Insurer and the Insured. • Identify potential losses • Measure and analyze the loss exposures. Valsmakis, A.C., Vivian, R.W. Is a contract of indemnity by which an insurance company undertakes to make good any damage or loss by fire to buildings or property during a specific time. Become familiar with the four steps of the risk management process. Huge Collection of Essays, Research Papers and Articles on Business Management shared by visitors and users like you. Economic risk (which we will refer to simply as risk) is the possibility of losing economic security. Lecture Notes on: Principles of Risk Management & Insurance It is therefore Primary function of Insurance to provide protection against future risks, accidents and uncertainty. The module deals with concepts of risk and risk management, including personal risk management, utility theory, risk identification, analysis and risk control, risk transfer, risk measurement and risk financing, risk pricing, capital adequacy, alternative risk transfer and solvency margins, regulation and supervision. Bibliography. Your email address will not be published. This is how insurance should work. It is only insurance that comes not only to help these large industries against possible risk but also help them to grow. Disclaimer 8. In other words it is a contract for mutual benefits. 4. But for supporting economically upto some extant the method adopted is known as insurance. The term “assurance” is generally limited to the first of these, because the event in respect of which the policy is taken out – namely the death of the person – is assured, or certain. You never know what is going to happen: This is the main reason for having insurance. Module 2Risk Management and Insurance. C. Benfield (2013). References. However there are certain functions which apply to every kind of insurance including life insurance as well as general insurance that includes every type of insurance such as home, automobile, jewellery, property and other valuable assets. View Notes - IRM Group1 Presentation.pptx from FIN 2101 at KCA University. In simple words insurance is sharing collective responsibility by a large number of people to compensate few people in case of crises Managing the collective responsibility (pooling persons) the insurance companies work as trustee to take care of such collective responsibility and the insurance regulations provide specific guidelines to ensure the insurance functions due serve the society as per the expectations of pooling members. This is a wrong concept. Before uploading and sharing your knowledge on this site, please read the following pages: 1. Terms of Service 7. & du Toit, G.S (2010). (2) Establishing criteria for handling risk: Risk management set the criterion on the basis of which it is possible to handle the arisen risk. o The • 2. So what is Insurance & Risk Management? It is therefore clear that insurance is a method by means of which a few losses are shared by a large number of people. Lecture Notes on: Principles of Risk Management & Insurance If such type of preventive measure exist there shall be lower rate of premium for getting insurance cover against risks. Large firms with many facilities often find a particular kind of risk assumption, called self-insurance, a practical way to avoid high insurance costs. This provides basis of the amount to be paid. Self-insurance is Gain knowledge of risk exposures, the management of pure risk, and the insurance mechanism. The insurance is nothing than a group of people feeling similar kind of risk come together and decide to make contribution towards formation of pool of funds to be used in case of crises arisen out of uncertain happenings. Insurance and Risk Management Specialists Clear Risk Solutions is more than a standard insurance provider; we are an industry leader in both insurance and risk management services and solutions. Need 6. Effective risk management has reduced the risk. 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