Course Title Risk Management and Insurance

Course Number AcFn 231

Degree Program BA degree in accounting and finance
Credits 3
Pre requisite None
Course Objectives& After accomplishment of this course, students will be able to:-
Competences tobe  Know basic concepts of risk
Acquired
 Explain the basic classification of risk
 Understand the principles of insurance
 Understand insurance Industry in Ethiopia
 Explain the nature and application of reinsurance
 Identify and measure business loss exposures.
 Discusses how to select among the major tools of risk management
 Measure, if not eliminate, exposures to loss or risk and analyze various
class of insurance contracts
Risk affects every aspect of an organization. The effects of risk are not confined
Course Description within any predictable boundaries; a single event can easily influence several areas
of an organization at once, producing consequences far beyond the immediate
impact. The pervasiveness and complexity of risk presents strong challenges to
managers, one of the most important being the coordination of risk management
across areas within the organization. It deals with: the nature and management of
pure risks, insurance and reinsurance; risk concepts, classification of risks,
management of pure risks through various risk handling tools, industrial safety,
general principles of insurance and major classes of insurance, reinsurance and
development & regulation of the insurance Ethiopia
WEEKS Course Contents Reading
1. Risk And Related Topics
1.1. Risk defined
1.2. Risk vs. uncertainty
1.3. Risk and probability
1.4. Risk, peril and hazard
1.5. Classification of risk
2. The Risk Management
2.1. Risk management defined
2.2. Objectives of risk management
2.3. Steps in risk management process
2.3.1. Risk identification
2.3.2. Risk measurement
2.3.3. Selecting the appropriate tools of risk
management
2.3.4. Risk administration
3. Insurance
3.1 Insurance Defined
3.2 Basic characteristics of insurance
3.3 Fundamentals of insurable risk
3.4 Insurance and gambling compared
3.5 Insurance and Speculation compared.
3.6 Benefits and costs of insurance
3.6.1 Benefits of insurance to the society
3.6.2 Cost of insurance to society
4. Legal Principle Of Insurance Contract
4.1. Principle of indemnity
4.2. Principle of insurable interest
4.3. Principle of subrogation
4.4. Principle of utmost good faith
4.5. Principle of contribution
4.6. Doctrine of proximate cause
5. Life And Health Insurance
5.1. Underwriting life insurance
5.2. Types of life insurance polices
5.3. Premium determination
5.4. Worker’s compensation insurance
5.5. Personal accident insurance
6. Non-Life Insurance
6.1. Motor insurance
7. Re-Insurance
7.1. Meaning of Re-insurance
7.2. Reason for Re-insurance
7.3. Types of Re-insurance
8. The Insurance Business In Ethiopia
8.1. Development of insurance in Ethiopia
8.2. Regulation of insurance companies
8.2.1. Proclamation No. 68/1975
 8.2.2. Proclamation No.86/1994
8.2.3. NBE Directives
Teaching/Learning The teaching and learning methodology include lecturing, discussions, problem
Methodology solving, and analysis. Take-home assignment will be given at the end of each
chapter for submission within a week. Solution to the assignments will be given
once assignments are collected. Cases with local relevance will also be given for
each chapter for group of students to present in a class room. The full and active
participation of students is highly encouraged.
Assessment/Evaluation The evaluation scheme will be as follows:
Component Weight coverage
Test 1 10%
Test 2 10%
Test 3 15 %
Quiz 1 5%
Project 10%
Assignment
Final Exam 50% All chapters
Role of Instructor He/she will come to the class regularly on time and deliverthe lecture in a well-
organized manner. Besides, at the endof each class he/she gives reading
assignment for the nextclass. He/she will make sure that proper assessments is
given. He/she is also responsible to give feedback for each assessment.
Role of Students The success of this course depends on the students’ individual and collective
contribution to the class discussions. Students are expected to participate
voluntarily, or will be called upon, to contribute to set exercises and problems.
Students are also expected to read the assigned readings and prepare the cases
before each class so that they could contribute effectively to class discussions.
Students must attempt assignments by their own. Proficiency in this course comes
from individual knowledge and understanding. Copying the works of others is
considered as serious offence and leads to disciplinary actions.
Text and reference  Teklegiorgis Assefa (2004), Risk Management and Insurance, reference
books Mega Printing PLC, Mekelle University.
 Hailu Zeleke, Risk and insurance. Lecturer, AAU.
 George E. Rejda, principles of Risk Management and Insurance, 6 th ed.
1998,Addison-wesley.
 C. Arthur Williamsjrand Richard M. Heins. Risk Management and
Insurance , 4thed, 1981 McGraw-Hill
 Joel Bessis, Risk management in Banking, 2nd, 1998, Wiley.
 HailuZeleke, Insurance in Ethiopia, AAU.