CHUKA UNIVERSITY
FACULTY OF BUSINESS STUDIES
DEPARTMENT OF BUSINESS ADMINISTRATION
BCOM 241: RISK AND INSURANCE
LECTURER: T .MOTINDI
CELL PHONE NO: 0720074095
COURSE PURPOSE
This course aims at introducing the learner to the concepts of risk and insurance and its
application in daily life.
EXPECTED LEARNING OUTCOMES
At the end of the course, learners will be able to:
(i) Explain the nature of business risk;
(ii) Examine and evaluate the impact of risk on the decision-making processes of
organizations;
(iii) Identify and review the techniques used to manage risks, codify and quantify these risks;
(iv) Identify and evaluate the strategies and techniques used to mitigate the impact of these
risks on the business, including hedging, insurance and the development of effective
control processes and structures.
(v) To have an overview of insurance as a major device of risk management
COURSE DESCRIPTION
Introduction to risk and insurance. Definition and concept of risk; uncertainty and levels of risk;
perils, hazard and [Link] triangle; frequency and severity of risk. Types of risks,
classification of risk, Burden of risk. Techniques of handling risks. Definition of insurance;
nature and scope of insurance. Evolution of insurance. Insurance terminologies. Insurability of
risks. Functions of insurance, significance of insurance. Insurance wagering. Limitation of
insurance. Insurance contract. Principles of insurance, classes of insurance; bonds and surety.
Underwriting; proposal form, Premium rating, policy documentation, claim process and renewal
system. Insurance market place. Insurance regulation. Emerging issues in risk and insurance
COURSE CONTENT
1. Introduction
Definition of Risk
Origin of risk
Nature of risk( Uncertainty, Measure, cause of loss)
Henrich triangle
Economic significance of risk
2. Concept of Risk
Relation of Risk to Insurance
Types of Risks( social, reputational, Physical, public, Political, Employee dishonesty,
Accident, death and injury, Financial, Liquidity, Credit, Market
Risk, Peril, Loss &Hazard
The Burden of Risk to Society
3. Classification of Risks
Pure and speculative risks
Subjective and objective risks
Particular and fundamental risks
Static and dynamic risks
Financial and non-financial risks
Personal and business risks
4. Risk management techniques
Risk control
Risk avoidance
Risk reduction
Risk financing
Risk retention
Risk acceptance
Risk transfer
CAT 1
5. Insurance: Concepts Legal Aspects & Principles
Definition and significance of Insurance
Requisites (Characteristics) of Insurability
Origins & Development of Insurance
Legal Aspects and Principles of Insurance(Insurable interest, proximate cause, utmost
good faith, indemnity ,subrogation and claim decisions, contribution and claims sharing,
Insurance contracts)
Subject matter of Insurance
Insurance terminologies
6. Principlesof insurance
Insurable interest
Subrogation
Proximate cause
Indemnity
Utmost good faith
7. Classes of Insurance
Life and Health Insurance (whole life, Term Assurance, Endowment, Personal Accident,
health insurance policy..)
Property, Liability & Motor Insurances- Fire, Theft,GIT,Money insurance,domestic
package, Business interruption, All risks,bonds, Fidelity Guarantee, public liability,
product libility
Insurance Underwriting and Claims Management (Proposal form, risk selection, policy
documents, Claims function and claims process, application of excess, franchise,
deductible)
8. Insurance Market
Agents
Brokers
Bancassurance
Service providers
Buyers of insurance
Insurance Companies
Reinsurance
9. Regulation of insurance Industry
Functions of Insurance Regulatory Authority
How IRA supervisors and regulates the insurance industry
Reasons why the insurance industry is regulated and supervised
Self-regulation
10. Emerging trends on risk and insurance
CAT 2
TEACHING METHODOLOGY
Teaching of this course will be conducted through formal lectures and class discussions,
presentations and assignments.
Teaching Materials/Equipment
LCD projector, Smart Board, white board markers, chalk, Text books, Journals.
ASSESSMENT
Assignments & CATs 30%
Final Examination 70%
100%
REFERENCES/READINGS
1. Greene M.R; Trieschmiann. Risk and Insurance; 5th Edition; Ohio,
Southwestern/Publishing
2. Dorfman S.M. Introduction to Risk Management and Insurance, 9th Edition, Prentice
Hall
3. Vaughan, Emmett, J. Fundamentals of Risk and Insurance; 5th Edition. John Wiley &
Sons
4. GCA Dickson “Risk and Insurance” The Chartered Insurance Institute, Study Course
510, Distance Learning
5. Ivamy, E.R.H, General Principles of Insurance Law, London, Buttherwoths Insurance
Library
6. Rejda E. G, Principles of Risk Management and Insurance, 11th Edition
7. Insurance Act and Other relevant materials
