| Module Code: MAN2080 |
Module Title: INSURANCE SERVICES |
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Module Provider: School of Management
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Short Name: MAN2080
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Level: HE2
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Module Co-ordinator: AGYEI-AMPOMAH S Dr (SoM)
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Number of credits: 20
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Number of ECTS credits: 10
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| Module Availability |
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| Assessment Pattern |
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Unit(s) of Assessment
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Weighting towards Module Mark (%)
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Achievement of the learning outcomes for this module is assessed in two ways:
· via a coursework assignment; and
· via a written examination.
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Coursework assignment:
The assignment will take the form of case study questions. Students will be expected to collect information, undertake research, reflect on or analyse comparative perspectives. The assignment will focus on principles of insurance, the composition of the market and the operations of insurance organisations.
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50%
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Examination:
Questions will be practical, application-based and focused at an operational level.
The paper will be structured as follows:
· Two compulsory 20-mark questions on insurance products and business functions; and
· One 10-mark question, from a choice of two, covering insurance law and regulation and key issues currently facing the insurance industry.
Time allowed: Two hours
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50%
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Qualifying Condition(s):
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| Module Overview |
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This module provides students with an understanding of the principles and practice of the insurance market and how insurance companies operate in the property and casualty (P&C) and long-term insurance markets in the and worldwide. It assumes no prior knowledge of the insurance marketplace, and is designed to provide students with a sound understanding of all aspects of the nature and role of insurance, from basic principles through to how the industry works in practice. This includes how the insurance market functions and the relationship between the organisations involved, including why and how they are regulated. It also provides an overview of the types of products available. Students will be in a position to compare the relative merits of different insurance products and their suitability for customers in different circumstances. They will also have the opportunity to demonstrate their understanding of product lifecycle and pricing aspects, how insurance companies operate and the insurance sector's positioning within the wider financial services environment.
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| Prerequisites/Co-requisites |
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Financial Services Commercial Environment module.
Management in Financial Service Organisations module.
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| Module Aims |
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This module has been designed to provide the requisite skills, knowledge and understanding to enable students to acquire a broad picture of the principles of insurance and the key areas of insurance practice and operations.
Students are firstly provided with an overview of the principles of insurance, with a focus on insurance as a risk transfer mechanism and the benefits this brings to the individual and the economy. The specific requirements of insurance contract law are also covered and include the legal requirements of insurance agency agreements. The focus then broadens to look at both the P&C and long-term insurance market and how they operate, including their relationship with the investment and banking markets. This includes the role of regulation and the specific requirements of legislation such as Financial Services Markets Act 2000 (FSMA 2000). However, the international element of the module is emphasised here by making comparisons with other regulatory regimes.
Whilst a detailed knowledge of insurance products is included in this module, an understanding of how products are classified and constructed is covered. This enables students to analyse a wide range of products and compare those available across borders and product categories.
The module then focuses upon how an insurance company operates. This is done by considering the product lifecycle from pricing, through underwriting and customer management, to claims. The syllabus also looks at the key issues facing insurance as it works to manage the numerous political, economic, social and technological changes such as regulation and changes in the insurance value chain. Finally, the syllabus looks at the possible changes that the industry may face in the future.
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| Learning Outcomes |
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On completion of this module, students will be able to:
· Understand the principles of insurance and the benefits of insurance to individuals and the economy
· Describe the composition of the P&C and long-term insurance markets and their relationship to the wider financial services market
· Understand the different organisations involved in the insurance market
· Explain the role of the different categories of organisations in the insurance market
· Understand the regulation and control of insurance operations
· Discuss the concepts of insurance law and the law of agency as applied to insurance
· Explain the principles underlying the development of insurance products
· Understand the range of P&C and long-term insurance products
· Explain the workings of the technical functions of insurance operations, including pricing, underwriting, customer management, claims and investment management
· Discuss some of the current and future issues facing insurance operations, including the changing nature of risk, developments in technology, bancassurance and outsourcing
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| Module Content |
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Principles of insurance
This section of the syllabus has been designed to provide students with an overview of the main principles of insurance. It covers insurance as a risk transfer mechanism, why individuals and organisations might seek to purchase insurance, what risks and perils are insurable, and the benefits to be derived. It focuses on the following issues:
· Insurance as a risk transfer mechanism
· Insurable risks
· The need for insurance
· Benefits of insurance, e.g. economic and social role
Composition of the insurance market
This section of the syllabus examines the composition of the insurance market and its relationship with the wider financial services marketplace. It covers the role of the different players, including insurance operations and service providers, in the insurance value chain. It focuses on the following issues:
• P&C insurance market
• Long-term insurance market
• The insurance value chain
• Role of other insurance service providers
• Relationship with the investment and banking markets
Organisation and working of insurance operations
This section of the syllabus examines how the wide variety of organisations in the insurance market work together to ensure an effective market operates. It distinguishes between the producers, distributors and reinsurers of insurance. In doing so, it also examines how these parties who work together also compete against each other in some situations. It focuses on the following issues:
• Distribution channels/models, e.g.
o Direct
o Intermediaries
o E-commerce
• Types of organisations in insurance, e.g.
o Mutual
o Captive
o Composite
o Bancassurers
o Brandassurers
o Intermediaries
o Pools
o State as insurer
o Lloyd’s model and the
London market
o Reinsurance
o Traditional
o Alternative Risk Transfer
Regulation of insurance operations
This section of the syllabus provides an overview of why the insurance industry needs to be regulated and identifies the key components of regulation, such as capital adequacy, consumer protection, compliance and complaints. It explores the regulatory regime in the
but there is also an international focus, within which other regulatory regimes are considered and contrasted. It focuses on the following issues:
• Rationale
• Role of the supervisor and regulator, e.g. consumer protection
• Solvency
• Capital adequacy
• Developments following
Basel 2
• Basic accounting practices in insurance
• Example of an advanced regime: key elements of the regime under FSMA 2000
• Comparisons with other regulatory regimes, e.g.
• Application of other regulation to insurance, e.g. data protection, money laundering
• Compliance and complaints
Insurance law
This section of the syllabus provides an overview of the legal principles that are specific to insurance and go beyond the usual laws of contract. There is an emphasis on how specific principles make certain aspects of insurance different from other areas of financial services. This includes the law of agency as it applies to insurance. It focuses on the following issues:
• Insurable interest
• Utmost good faith
• Proximate cause
• Indemnity
• Subrogation
• Contribution
• Law of agency as applied to insurance
Insurance products
This section of the syllabus aims to identify the key components of insurance products and to draw out the common factors so that products can be compared and contrasted across product categories and international markets. A list of the actual individual insurance products will be provided for reference in the learning materials for this module, but the emphasis is on helping students to understand the ways in which different classifications of products are grouped, developed and delivered.
It focuses on the following issues:
• Classifications of insurance
• Statutory
• Market practice
• Key elements of an insurance product
• Peril
• Subject matter
• Customer type
• Customer segment
• Monoline and packaged products
• Documentation
Business functions in insurance operations
This section of the syllabus introduces and explores the key business functions in an insurance company. The key processes involved in pricing, underwriting, customer service, claims and investment management are explained, enabling students to gain an appreciation of the technical functions of insurance operations and enhance their ability to interact with, and inform, customers effectively. It focuses on the following issues:
• Pricing
• Role of the actuary
• Standard cover
• Pricing for profit, e.g. burning cost/exposure methods, risk premiums, flat premiums, adjustable premiums
• Charging structures, e.g. transparency, CAT standards
• Use of data, e.g. CMI, ABI stats, underwriting cycles
• Underwriting
• Role of the underwriter
• Underwriting authority, e.g. use of software
• Proposal
• Assessment
• Moral and physical hazard
• Survey and further investigations, e.g. Access to Medical Records Act
• Acceptance
• Policy terms and conditions
• Customer service
• Role of customer services manager
• Customer relationship management
• Maintenance of records and Data Protection
• Claims
• Role of the claims manager
• Reserving
• Claims handling processes
• Role of the loss adjuster, loss assessor, claims investigator
• Fraudulent claims
• Investment management
Key issues facing insurance
This section of the syllabus identifies and explores the key issues currently facing the insurance industry. It discusses how organisations within the industry have responded to various challenges to date, and goes on to create an awareness in students of possible future challenges and what future response options may be available to the industry. It focuses on the following issues:
• The changing nature of insured risk, e.g. the compensation culture, emerging risks, climate change, terrorism
• Harnessing new technology: e-business in insurance
• Disaggregation of the insurance value chain, e.g. outsourcing, brandassurance, joint ventures, run off
• The growth of bancassurance
• Regulatory and legal developments
• Reputation of the insurance market, e.g. mis-selling
• Consideration of what the future holds for insurance
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| Methods of Teaching/Learning |
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The teaching and learning strategy is designed to ensure that the students achieve the learning outcomes by the end of the module.
The teaching and learning methods include formal lecture and tutorial, private study of text and other supporting materials, a formal coursework assignment, of informal exercises, both individual and group-based and pooling of experience and knowledge through class and individual discussion.
Assessment Strategy:
The assessment strategy is designed to achieve a balance between testing the student's skills of knowledge recall and understanding and those of analysis, research, reflection and application. This distinction is reflected in the different assessment instruments and the balance between the coursework assignment and the final written examination.
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| Selected Texts/Journals |
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| Last Updated |
| 04/08/2010 |
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