MF0018 - INSURANCE AND RISK MANAGEMENT

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ASSIGNMENT

DRIVE	SPRING 2019
PROGRAM	MBA
SUBJECT CODE	MF0018
SUBJECT NAME	INSURANCE AND RISK MANAGEMENT
BOOK ID	B1816
CREDITS	4
MARKS	60

Note: Answer all questions. Kindly note that answers for 10 marks questions should be approximately of 400 words. Each question is followed by evaluation scheme.

Q1 Discuss the fundamental features of insurance.

Answer: Insurance is defined as a co-operative device to spread the loss caused by a particular risk over a number of persons who are exposed to it and who agree to insure themselves against that risk.

Features of insurance:

1.       Sharing of Risk: Insurance is a device to share the financial losses which might befall on an individual or his family on the happening of a specified event. The event may be the death of a breadwinner to the family in the case of life

2.        

Q2. What do you understand by solvency margin? Describe different methods of determining solvency margins.

Answer:  Solvency margin: It indicates how solvent a company is, or how prepared it is to meet unforeseen exigencies. It is the extra capital that an insurance company is required to hold. As per the Irda (Assets, Liabilities, and Solvency Margin of Insurers) Rules 2000, both life and general insurance companies need to maintain solvency margins. While all non-life insurers are required to follow the regulations, life insurance companies

Q3 a. What are kiosks?

Answer: Kiosks: A kiosk is a small, stand-alone booth typically placed in high-traffic areas for business purposes. It typically provides information and applications on education, commerce, entertainment, and a variety of other topics. Kiosks are popular due to the number of advantages they provide.

Common Types Of Kiosk Machines:

1.       Touch Screen Kiosks: This is a stand-alone device that features a touch screen interface and uses highly advanced programming software.

b. How are the agents and policyholders benefitted through the implementation of IT in Insurance companies?

Answer: Benefits of IT implementation in Insurance companies:

1.       Fraud Prevention: Fraud comes in all shapes and sizes. Insurance fraud costs companies billions of dollars per year across the globe.  Insurance companies should establish a technology framework, tap into advanced automation and analytics, and take steps to prevent it.

Q4.Write short notes on following

1. Riders in insurance

Answer:  Rider in insurance:  A rider is an insurance policy provision that adds benefits to or amends the terms of a basic insurance policy. Riders provide insured parties with options such as additional coverage, or they may even restrict or limit coverage. There is an additional cost if a party decides to purchase a rider. Most

2. Fire Insurance Contract

Answer:  Fire Insurance Contract: Fire insurance contract provides payment for the loss of use of the property as a result of a fire, or for additional living expenses that were necessitated by uninhabitable conditions

3. Marine Insurance

Answer: Marine Insurance: Marine insurance covers the losses or damages caused to ships, terminals and any transport or cargo by which goods are transferred, acquired, or held between different points of origin and final destination. The term may also apply to inland marine but it is usually used in the

4. Aviation Insurance

Answer: Aviation Insurance:  Aviation insurance is a policy that offers property and liability coverage for aircraft. It covers losses resulting from aviation risks that come about due to the maintenance and use of aircraft, property damage, loss of cargo, or injury to people. It protects both its owners and aircraft operators from unforeseen losses. Aviation

Q5. Why is product development essential for the insurance industry? List the basic features of the insurance products in the life insurance sector in the country.

Answer: Product development: The creation of products with new or different characteristics that offer new or additional benefits to the customer. Product development may involve modification of an existing product or its presentation, or formulation of an entirely new product that satisfies a newly defined customer want.

Q.6 Explain the concept of Reinsurance. List down various benefits of Reinsurance.

Answer: Reinsurance: Reinsurance is also known as insurance for insurers or stop-loss insurance. Reinsurance is the practice whereby insurers transfer portions of their risk portfolios to other parties by some form of agreement to reduce the likelihood of paying a large obligation resulting from an insurance claim. The party that diversifies its insurance portfolio is known as the ceding party. The party that accepts a portion of the

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call us at : 08263069601