Property - Casualty Risk Management & Planning
Spring 2007

RM 377
Professor: Patricia M. Arnold, CPCU, ALCM
calendar
Office: GSB 5.126A
research paper
Phone: 475-6728
syllabus
Office Hours: 2-3 PM M-W-F
e-mail address:  pat.arnold@mccombs.utexas.edu OR pma55@austin.rr.com
Class location: GSB 2.124, 9-10 AM, M-W-F (#03970)  
Course Calendar

 

Textbook: Harrington & Niehaus, Risk Management and Insurance (2nd Ed.), McGraw Hill/Irwin publishers, New York, NY, 2004 (required)


Reading and Homework Assignments


Evaluation & grading - see syllabus


Date

Topic

Reading assignments, reference and learning materials

January 17

Syllabus, Calendar, Research Project Overview

Risk Management Basics

January 19

 Reading: Chapters 1 through 3, outlines
Slideshow:chapter 1
Ref: History of Risk Management, the Risk Management Standard; quiz; flowchart

January 22

Risk and its Management & Objectives of Risk Management - Workshop on ID of Risks

Reading: New Global Challenges for Insurers
Ref: The Insurance Environment; & Palm Beach Post catastrophe risk financing (1/19/2006)
January 24 Risk Identification and Measurement Reading: Law, Insurance & the Internet
Slideshows: chapter 2 and chapter 3
January 26 Risk Identification and Measurement  (cont'd) Reading: chapter 3
Slideshow:chapter 3
Ref: The Insurance Environment; & Palm Beach Post catastrophe risk financing (1/19/2006) 
January 29 Homework - Hartford analysis (prep for project)  
January 31 Pooling Arrangements & Diversification of Risk Reading: Chapter 4, outline
Slideshow: chapter 4; PWC selected slides
Ref: Insurance Digest, pp. 12-17, 18-20 (PwC)
February 2  In-class quiz chapter 1 through 4
February 5 Products Liability: consumer products & product recall - global issues

Reading: Advantage China
Slideshow: Outsourcing, Products Liability and China
February 7  Pooling Arrangements & Diversification of Risk (cont'd) also: Advantage China homework due in class

Reading: China Insights - pp. 1-3
February 9

Insurer Ownership, Financial and Operational Structure

 Reading: Chapter 5, outline
Slideshow: chapter 5
Ref: Profit Decomposition, Profitability in the Non-Life Insurance Markets; An Analysis of P/C Insurer Profitability and its relationship to Rates
February 12 - exam #1 - chapters 1 thru 5
February 14 Insurance Regulation
Insolvencies, Solvency Ratings, and Solvency Regulation

Reading: Chapter 6 & 7, outline 6, outline 7
Slideshow: chapters 6 and 7
Ref: Back to the Business of Insurance; Insolvencies/Guaranty Funds; Operational risks; NCOIL Letter 4/2004
February 16 Insurance Pricing Reading: Chapter 8, outline
Slideshow: chapter 8
Ref: Managing Overconfidence; Battling Rising Prices; Reading: How to Help Stabilize Premiums; Premium Growth and Underwriting Result; P/C Premiums, Reserves & Surplus Growth 
February 19 Homework  
February 21 Risk Aversion and Risk Management by Individuals and Corporations Reading: Chapter 9, outline
Slideshow: chapter 9
Ref: Buy-Sell Arrangements
February 23 In-class quiz Chapters 6-9, selected readings
February 26 Insurability of Risk, Contractual Provisions, and Legal Doctrines Reading: chapter 10, outline
Slideshow: chapter 10
Ref: Contract Risk Allocation
February 28 Project assigned, groups formed, DISCUSSION Managing the Risks of Outsourcing
Risk Management & Insurance Issues
March 2 Loss Control Reading: Chapter 11, outline
Slideshow: chapter 11
Ref: Loss Control Spending Survey
March 5 Homework Chapters 6-11, selected February readings

March 7

Legal Liability for Injuries

Reading: Chapter 12, outline
Slideshow: chapter 12
Ref: Construction Accidents (Labor Law)

March 9

Catastrophe risk, IT/modeling

Reading: textbook pp. 286-294 (14.3-14.4 of chapter 14),  

Slideshow: reinsurance (Kline and Budd), Using Catastrophe Models for Pricing...

Ref: The Hartford - Lessons in Integration; St. Louis Bar Journal; The Loss of the Uncertainty Effect (2001)
Business Risk Management - tort, fiduciary, contract liabilities, also employer/employee relationships
March 19 Outsourcing risks - process/service, infrastructure Reading: @ Risk (AIG); Selective Sourcing
Slideshow: eCommerce
Ref: Recovery Chronicles; digital risk; Vulnerability; Catastrophes, Capital Markets, and Risk Securitization (and modeling) slideshow
March 21 In-class quiz Chapters 10, 11, 12, 14 (selected parts), selected readings

March 23

 Management Liability, Workers' Compensation and Employee Injuries

Reading: Chapter 18, outline
Slideshow: chapter 18
Ref: Frontline: Safety; personal protective equipment; III slideshow

Crossword, clues

March 26 Retirement Plans, Risk Management and Shareholder Wealth

Reading: Chapter 20, outline
Slideshow: chapter 20
Ref: KPMG Fraud Survey; risk management continuum (and full article: world-class risk management)
March 28 Tax, Regulatory, and Accounting Factors Affecting Corporate Risk Management Reading: Chapter 21, outline
Slideshow: chapter 21
Ref: Enterprise Risk Management Topics (Casualty Actuarial Society), Reserving
March 30 - Exam #2 - chapters 11, 12, part of 14, + chapters 18, 20, 21, and selected readings
April 2 Risk Retention/Reduction Decisions and Reading: Chapter 22, outline, and article "Financial Executives Say Risk Management Falls Short of Expectations" (cfo.com)
Slideshow: chapter 22; CAS slideshow
Ref: Managing Risk to Enhance Stakeholder Value
April 4 Project draft due (single page from each student - see "guidelines")
Guest Speaker: James Kallman, PhD

See "Project" and "Research Guidelines"
April 6 Commercial Insurance Contracts Reading: Chapter 23, outline
Slideshow: chapter 23
Ref: Risk Management Checklist; slideshow focusing on Work Comp, reserve deficiencies...cost of risk study
April 9   Hedging with Derivative Contracts Ethics in Insurance/Risk Management, Alternative Risk Transfer

Reading: Chapter 24, outline
Slideshow: chapter 24; Insurance Securitization slideshow
Ref: (a) Securitization of Insurance Risk (ISO); (b) Trends in Insurance Securitization;  (c) Financing Catastrophe Risk; (d) ISO Hurricane Experience; (e) Best Practices in Loss Prevention; (f) The Importance of Calculating a Capital Charge for Insurable Risk (IRMI); Sidecars (Rough Notes)

April 11

 Hedging with Derivative Contracts Ethics in Insurance/Risk Management, Alternative Risk Transfer
 and homework due & Guest Speaker Philip Trowbridge, AMD

The Catastrophe Bond Market 2006
April 13  Alternative Risk Transfer Reading: Chapter 25, outline
Slideshow: chapter 25
Ref: The Picture of ART; AMD's 2005 Corporate Responsibility Report
hand back homework, and practice quiz chapters 22-24
April 16 Alternative Risk Transfer (cont'd)

Analysis Tools Used in Corporate Risk Management

 Reading: Chapter 26, outline;
Slideshow: chapter 26;  
Ref: Emerging Trends in Internal Controls; Marketplace Realities (3/2007 - 2+MB); Project Finance; S-Ox: Board and Audit Committee Roles; D & O Liability Snapshot and Forecast 2005

April 18

Corporate Liability to Customers, Third Parties, and Shareholders - Professional, Directors & Officers, Fiduciary Liability

Reading: Chapter 28, outline
Slideshow: chapter 28
Ref: Glossary
Reading: Medical Malpractice - Anatomy of a Crisis; Medical Malpractice Trials & Verdicts - 2001; Medical Malpractice Insurance Claims in Seven States; Med Mal "Stability not Crisis" report March 2005

April 20 

Issues in Liability Risk and Its Management

Reading: Chapter 29, outline; Insurance Law Outline 
Slideshow: Emerging Liability Issues, slideshow
Ref: Using Old Insurance Policies as Weapons

April 23 Project final papers due
Guest Speaker: Philip K. Maxwell, JD		 Legal issues in Insurance & Risk Management 

April 25

 Review - exam prep 

 

April 27 - Exam #3 - chapters 22-26, 28, 29 and selected readings
April 30 Research presentations & critique (see Insurance Markets Game) Groups 1 - 4

May 2

Research presentations & critique

Groups 5 - 7
May 4 Research Presentations & critique / problem-solving exercise All Groups must be present

May 4 - wrap-up research
Updated 8/21/2007