RISK MANAGEMENT AND INSURANCE

Course objective: This course aims at providing fundamental knowledge and exposure to the
concepts and theories of risk management and insurance and to facilitate the students in
appreciating need/significance of various types of insurance to mitigate the risks.

UNIT-I

Concept of Risk: Risk and Uncertainty, Types of Risk, Burden of Risk, Sources of Risk,
Methods of handling Risk, Degree of Risk, Management of Risk.
Corporate and Personal Risk Management: Risk Management Process, Objectives of Risk
Management, Risk Management Techniques, Need for a Rationale for Risk Management in
Organizations, Understanding the cost of Risk, Individual Risk Management and the Cost of
Risk.

UNIT-II

Identification of Risk: Tools/Techniques for perception of risk; Methods for determining the
operative causes of peril; Safety audit.
Evaluation of Risk: Risk Avoidance & Reduction of Risk: methods of loss prevention and risk
reduction; Role of surveyors in loss prevention/ risk reduction.
Techniques of Risk Financing: Retention of risk; Captive insurance companies,

UNIT-III

Insurance: Definition and Basic Characteristics of Insurance, Requirements of an Insurable
Risk, Adverse Selection and Insurance, Insurance vs. Gambling Insurance vs. Hedging;
Essentials of Insurance Contracts, Principles of Insurance, Legal Aspects of Insurance Contract
Types of Insurance: Life Insurance, General Insurance: Fire and Motor Insurance, Health
Insurance, Marine Insurance, Automobile Insurance.
UNIT-IV

Regulatory Framework of Insurance: Role, Power and Functions of IRDA, Composition of
IRDA, IRDA Act’1999.
Control of Malpractices, Negligence, Computation of Insurance Premium, Loss Assessment and
Loss Control, Exclusion of Perils