Post Graduate Programme in Management

2016-17
TERM: VI
TITLE OF THE COURSE: BASICS OF INSURANCE AND RISK MANAGEMENT
CREDITS: 4
Instructors:
Prof. Partha Saha and
Mr. Aditya K Biswas

COURSE: Elective Course

Email:
shree.partha.saha@gmail.com
adityabiswas60@gmail.com

No. of Sections: 2
Tel. Number
089023-96091
098305-26539

COURSE DESCRIPTION
This course will provide a clear understanding of the Insurance business that is becoming
gradually important in India. This course will also cover insurance risk management
principles, frameworks, and practices .Traditionally Indians are not aware of the
insurance products and processes that may make the life & business simpler.
Government has been the main driver behind insurance industry so far but now a good
number of private players with support from extremely large global organizations have
significantly strengthened the insurance market in India. The business in India is growing
rapidly. Besides being employed in Insurance Industry it is important for every individual
& groups, corporate or private, to understand different type of insurance products
available in the market today and merits of each. A management student should also
understand the Business Process in this domain which is mostly computerized today on
web based servers with Mobility. Students will learn about financial, operational and
other specific/unique risks faced by businesses. Lectures, real life practical business
examples, case studies and projects will be used in this course for explaining the
significance of insurance management and risk mitigation technique thereof. The course
will provide students necessary inputs that are essential for them in todays
environment as a management expert. It will also help managers take effective
operational and strategic decisions for running their organizations.
COURSE OBJECTIVES

To introduce the basic and advanced terminology in the Insurance domain.

To help the students grasp the fundamentals of Insurance business types &
processes.
The students should be able to interact with Insurance agents, brokers &
companies.
To equip the students with the capacity to understand interrelated set of basic
and advanced statistics that is used while defining an Insurance product.
To enable the students to apply the knowledge of this domain in designing a
business model involving Insurance products & processes. It may even be for his
own organization.

To adopt case based approach in understanding the role of risk management in

insurance business

LEARNING OUTCOMES:
Expected Learning Outcomes and Associated Measures
At the end of the course the student is expected to accomplish the following learning
outcomes (CLO). Alignment of CLO with the Programme Level Goals & Objectives and
Assessment of the learning outcomes of the course is presented below.
Course Learning Outcome
1. Exhibits the knowledge of
Insurance business in India
and globally
2. Identifies considerations
in design of Insurance
products. First step towards
building
a
management
process which may be
computerized.

Program Level Goals/

Outcome
PLG
1:
Demonstrates
knowledge
of
various
products in Insurance and
their Utility to the society
and business at large.
PLG2: Demonstrates clear
understanding of the process
modules and overall business
model. As a result of this
one can participate in
operations systematization.

Assessment Tool(s)
Classroom interactions.
Case study presentation.
Question(s) Embedded in
Mid Term / End-Term
Exams
Classroom interactions.
Case study presentation.
Question(s) Embedded in
Mid
Term/End-Term
Exams

PEDAGOGY/TEACHING METHOD
This course will consist of lectures, case studies, real life insurance business example
and team based exercise. The lectures will include conceptual knowledge delivery about
the topic, and focus on key definitions, foundations, and challenges faced in insurance
risk management. This will be followed by discussion on business practices and issues
involved in those practice. To understand the concepts learnt during the lectures
better, matching real-life case studies will be discussed as well.
EVALUATION:
Class Participation
Quizzes
Analysis and Group Presentation
End term
Total

weightage (%)
10%
20%
30%
40%
100%

SCHEDULE OF SESSIONS
Module I
Introduction to Insurance
Module Objective: To introduce the students to the domain of Insurance. After this
module students will have clear view of the Insurance Industry, business model and
relevance to the society.
Sessions and Objectives
Session 1: Principles and Practice of Life insurance
Objective: The insurance industry runs on certain basic principles. These will be
discussed with examples. The structure of the philosophy on which the Insurance
business runs will be clear after this session.
Readings:
1.
Insurance Institute of India- IC 23- Application of Life Assurance
2.
Insurance Institute of India IC 33 Life Assurance
Session 2: Principles and Practice of Life insurance (contd)
Objective: As above. Some cases will be discussed to further clarify the domain.
Reading: Insurance Institute of India IC 30 Practice of Life Assurance
Session 3: Principles and Practice of General insurance
Objective: The operations and considerations related to General Insurance are different
from Life Assurance. After this session students will understand the various types of non
life products offered by the insurance companies.
Reading: Insurance Institute of India IC 32- Practice of General Insurance
Session 4: Principles and Practice of General insurance (contd)
Objective: As above. Some cases will be discussed to further clarify the domain.
Reading: Module I, Principles and Practice of General Insurance, The Institute of
Chartered Accountants of India: New Delhi
Session 5: Health and Miscellaneous Insurance
Objective: Insurance business today touches all individuals and groups through multiple
products offered. It is important for each of us to know about it and understand the pros
and con of each product. This session will give students an insight to this segment of
insurance.
Readings:
1.
Insurance Institute of India IC 27- Health Insurance
2.
Insurance Institute of India - IC 78 - Miscellaneous Insurance

Module II: Risk Management, Finance and Computer based Systems

Module Objective: Risk management basics related to Insurance will be covered in this
module. This module also introduces some of the most important components that are
to be considered in the insurance domain. Finance is a module that has to go with any
business model. However in the case of insurance general finance model needs some
specific considerations. Lastly whatever we do needs to be digitized today to address
speed and accuracy of operation. Mobility also is a unique expectation today. All these
components will be discussed in this module with practical references.
Sessions and Objectives
Session 6: Risk Management and Insurance
Objective: Identification and assessment of all risks is a key component of the insurance
underwriting and management process. This basic concept will be clear to the students
after this session
Readings:
1.
George E. Rejda: Principles of Risk Management and Insurance, Pearson: New
Delhi.
2.
Harrington. Niehaus: Risk Management and Insurance, McGraw Hill: New York
Session 7: Financial Management
Objective: A quick review of the DCF analysis and IRR will be done. An example of
Insurance system with GL heads and transaction processes will be discussed to
understand the financial management aspects. This is quite complex when we consider
nontraditional products which are unit linked.
Reading: Pandey, Finance: A management Guide for Managing Company funds and
profits, PHI, New Delhi
Session 8: Financial Management (contd)
Objective: As above. Some cases will be discussed to further clarify the domain.
Readings: K.C. Mishra and R.C. Guria, Financial Management and Insurance Accounting,
Insurance Education series, Cengage Learning India Pvt. Ltd, New Delhi
Session 9: Accounting for Insurance
Objective: Various accounting heads related to any insurance product will help to
understand the underlying product management process and its characteristics. We shall
discuss a live case with data. This will help students grasp the core concepts.
Reading: K.C. Mishra and R.C. Guria, Financial Management and Insurance Accounting,
Insurance Education series, Cengage Learning India Pvt. Ltd, New Delhi
Session 10: Computers for Insurance
Objective: Insurance companies today cannot function efficientlyc without a computer
based application preferable web based so that Agents can operate seamlessly. Mobility
is of high priority today. In this session we shall discusss the components of a
computerized system and possible systems architecture.
Reading: ITL Education, Introduction to Computer Sciences, Pearson New Delhi

Module III: Legal framework and a few Non-Life Products

Module Objective: The Insurance industry operates strictly under a Legal framework of
the country. India has its own framework since independence which is changing now
while the basic is same in all the countries. Students attending this module will know
some products and legal consideration reviewed through case studies. This will give
them confidence in real life.
Sessions and Objectives
Session 11: Insurance Law and Regulation
Objective: The insurance industry in India is controlled by IRDA and is covered under the
judicial system. It is prudent to understand this legal system from the view point of both
the Insurer and the Insured. In this session we shall critically review the legal
infrastructure available and some frauds that need be controlled. Ethics in the insurance
industry is one area that concerns us.
Reading: K.C.Mishra and M.Bakshi, Legal and Regulatory Aspects of Insurance, CENGAGE
learning, Delhi
Session 12: Insurance Law and Regulation (contd)
Objective: As above. Some cases will be discussed to further clarify the environment.
Reading: Indian Institute of Insurance IC 24 Legal Aspects of Life Assurance
Session 13: Marine and Rural Insurance
Objective: The beginning of underwriting took place when marine vessels were
protected by such arrangements. It is now a very active segment where the Hull and
Cargo are insured separately along with the goods she carries. The underwriting process
is quite complex. Similarly insurance coverage in the rural area for crops and other
agricultural assets is extremely important. Government wishes to promote this. In this
session we shall discuss the scope of insurance as a social support.
Reading:
1.
Insurance Institute of India IC 67- Marine Insurance
2.
Insurance Institute of India - IC-71 Agricultural Insurance
Session 14: Fire and Motor Insurance
Objective: Fire insurance is an insurance to cover a risk effect of which is extremely
disastrous and often difficult to measure. Motor insurance is a legal requirement.
Students will get proper exposure to these two areas.
Readings:
1.
Insurance Institute of India - IC-57- Fire and Consequential Loss Insurance
2.
Insurance Institute of India - IC-72 -Motor Insurance
Session 15: Engineering and Liability Insurance
Objective: Engineering and Liability insurance is normally based on huge data properly
grouped and analyzed. Knowledge about the engineering components helps to design
the products like Warranty maintenance cost planning and insurance etc.
Superannuation & Gratuity liability are common.
Reading: Insurance Institute of India- IC-74, 77 and 79- Engineering and Liability
Insurance

Module IV: Additional Topics Marketing, Actuary, Reinsurance etc

Module Objective: Besides the insurance product & process design etc, one has to plan
marketing. There could be a well structured, well trained Agent hierarchy. This should
be carefully designed, protected and utilized. The concept of reinsurance as a master
umbrella ensures that the insurance market remain functional against huge loss
probability events also.
Sessions and Objectives
Session 16: Marketing of Insurance Services
Objective: The insurance industry needs some hard working sales force that will be in
touch with end client. Normally agents have good pursuing capability. Student need to
understand the Broker/Agent structure and see what a great company will do for
motivation. After all insurance is a very competitive business.
Reading: Philip Kotler and Kevin Lane Keller, Principles of Marketing, Pearson, New
Delhi
Session 17: Marketing of Insurance Services (contd)
Objective: As above
Reading: Insurance Institute of India - IC-31 - Insurance Salesmanship
Session 18: Reinsurance
Objective: Reinsurance is visualized as an Umbrella cover. This is very important for the
insurance industry to grow. Some basics of Reinsurance will be discussed.
Reading:
1.
Insurance Institute of India- IC-85- Reinsurance Management
2.
Module III, Risk Management and Reinsurance, The Institute of Chartered
Accountants of India: New Delhi
Session 19: Statistics for Insurance
Objective: Statistical analysis is the core of insurance management. The basics of
statistics will be quickly revisited followed by some analysis on the mortality etc. Some
indication of advanced statistical models also will be discussed. The role of actuaries
will be explained. It ius also important for the insurance company to collect lots of
indigenous as well as exogenous data to build suitable predictive models for product
design and management. Overview of all these will be given to the students.
Reading: Richard I. Levin and David S. Rubin. Statistics for Management.
Session 20: Actuarial Mathematics and Services
Objective: Actuaries play a most important role in the insurance business. We shall
discuss this most important job done by them.
Reading: Insurance Institute of India IC 28- Foundation of Actuarial Science
*****