Faculty of Commerce &

Bus. Administration

Topics of Research Projects

Course: Mathematics of Insurance

Dr. Nada M. Hafez

Target Students
Level 3

Groups
- Accounting (B) & (D)
- Statistics
- Business Administration (C)

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1) The terms peril and hazard are commonly used interchangeably with each
other and with risk. However, it is important to distinguish these terms. A
peril is a cause of a loss. A hazard, on the other hand, is a condition that
may create or increase the chance of a loss arising from a given peril.
- Distinguish between the terms risk, peril, and hazard. Explain and give
examples
- Identify different classifications for each term.
- What risks do you face as an individual? Which of these risks have you
elected to retain and which have you transferred?
- Illustrate your discussion through the process of risk management.

2) Risk management is defined as dealing with risk by designing and

implementing procedures that minimize the occurrence of loss or the
financial impact of the losses that do occur.
- Identify and explain what risk management tools are.

- Imagine that you are risk manager in certain organization:

- present your organization
- identify at least two different risks your organization might face.
- classify these risks according to nature of loss.
- classify these risks according to outcomes.
- Identify and explain the principal methods of handling each one of
these risks.
- Measure expected losses, and risk
- illustrate in details the risk management process for each one of these
risks.

3) The probability of loss and its potential severity affect the intensity with
which risk is felt by an individual. Would you find a 10 percent chance of
losing $100 or a 1 percent chance of losing $1000 more distasteful? Why?
- Explain how both factors (The probability of loss and its potential
severity) are very important to a risk manager.
- Identify the different statistical measures that could be used to quantify
risk, and compare between them.
- Illustrate your discussion through examples.

4) What risks do you face as an individual?

- Choose one of these risks that could be insurable, explain it

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 - Illustrate the type of risk.
- What are the possible suitable reactions to this risk?
- Discuss the principles of insurance and illustrate to what extend these
principles are applicable to that risk.

5) In property insurance, there are several provisions that might be stated in

the contract, such as pro-rata liability, excess and primary provision,
contribution by equal share, coinsurance, deductibles…etc.
- choose 2 different provisions (listed before or not listed).
- Explain each one of them (definition, when to be used, how to be used).
- Compare between them.
- Show your work through a hypothetical or real data.

6) An article on life insurance in a Midwestern newspaper stated: “It makes

good sense to purchase life insurance at an early age since the cost of
coverage increases the longer you wait”.
- Discuss this statement (Do you agree or disagree with this statement?)
- Justify your discussion by explaining the main factors of determining
the cost of coverage.
- Assume two scenarios. The first scenario is that you would purchase a
life insurance policy this year, the second scenario is to purchase a life
insurance policy after 10 years.
- Compare between the costs of the two scenarios assuming the same type
of policy.
- Illustrate your discussion assuming different types of premiums.

7) Annuity is one of the life insurance products. It has been stated that an
annuity is “upside-down” life insurance.
- Explain what this means (the difference between annuities and
insurance policies).
- Identify the various ways in which annuities may be classified and list
the different types of annuities in each classification.
- Suppose you want to purchase an annuity, determine its type, value, type
of premium and how to compute the value of premium(s).

8) There are several types of life insurance policies.

- Discuss main classifications of life insurance policies.
- Discuss the main factors of pricing life insurance policies.
- Illustrate how to compute the single premium for two different types of
life policies through a case study.
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9) There are several types of life insurance policies.
- Discuss main classifications of life insurance policies.
- Discuss the main factors of pricing life insurance policies.
- Illustrate how to compute the level premium for two different types of
life policies.

10) Whole life policies are one of the types of cash value policies.
- Discuss this statement
- Distinguish whole life polices from other cash value policies.
- Conduct a case study to compare between single and level premiums for
whole life policies.

11) Term policies are life policies that provide death protection only.
- Discuss this statement
- Distinguish between Term polices and cash value policies.
- Conduct a case study to compare between single and level premiums for
Term policies.

12) Endowment policy is a special case of whole life policies. Discuss

this statement.
- Discuss the main classification of Endowment policy, and distinguish
between Endowment policy and other types under the same
classification.
- Distinguish between whole life polices and endowment policies.
- Conduct a case study illustrating how to compute the single premium
of a whole life policy, and how to extend it to compute the single
premium of an endowment policy.

13) Endowment policy is a special case of whole life policies. Discuss

this statement.
- Discuss the main classification of Endowment policy, and distinguish
between Endowment policy and other types under the same
classification.
- Distinguish between whole life polices and endowment policies.
- Conduct a case study illustrating how to compute the level premium of
a whole life policy, and how to extend it to compute the single premium
of an endowment policy.

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14) A policyholder would wish to bundle death protection coverage with
savings accumulation in a life insurance contract. Do you agree or disagree
with this statement.
- Discuss this statement.
- Distinguish between level premiums and renewable term insurance
premiums.
- Conduct a case study to illustrate your computations.
- Explain what you would recommend to purchase. Why?

15) Compare between life insurance and fire insurance:

- Definition
- Contracts
- Scope of coverage
- Principles of insurance
- Unique characteristics.
- The main factors that affect the formal valuation of the insured object,
Premium (s) computation, compensation … (case study).