Course Introduction

1
Course Introduction

• RMI 4700
• Insurance Operations
• Robert Klein

8/13/09
2
Philosophy and Approach

• Course will be rigorous.
• Attendance and participation expected.
• You must be actively engaged in the learning
  process.
• Readings must be done in advance of class.
• Exercises and exams will be challenging.

3
What is This Course About?

• Insurance operations?
• Concepts and institutions/practices
• Why do insurers do the things they do they way
  they do them?
• Understand, analyze, apply, extend, critique
• Study insurance operations in a broad context
  economic, social, governmental.

4
Context

• Insurance industry evolving within broader
  financial economy.
• Greater attention to financial risk management.
• Important Trends
• current financial crisis
• competing financial services
• new methods of risk transfer/financing
• evolving distribution systems
• information technology
• globalization
• regulatory changes
• company/industry restructuring

5
My Background

• Insurance Economist
• 20 years in regulation 9 years at NAIC
• Joined GSU faculty in 1996
• Director of Center for RMI Research
• Broad research focus
• Intuitive and institutional perspective
• How does the world really work?
• Picking the brains of people who work in the
  industry.

Moral Hazard in the Flesh!
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Course Topics

• Financial Risk Management
• type of risks
• management devices
• Financial Analysis
• Financial Performance
• Firm Strategies

• Insurance Institutions Theory of the Firm
• Insurance Operations
• Products Marketing
• Distribution
• Underwriting
• Pricing
• Claims Adjustment
• Reinsurance
• Regulation
• Industry Organization

7
Course Objectives

• Understand business functions of insurance
  institutions within financial services sector.
• Apply economics and finance principles.
• Assess and manage risks.

• Understand organization of insurance markets and
  government involvement.
• Solve business problems involving primary insurer
  functions.

8
Resources

• Lectures
• notes on web
• Readings
• assigned
• other
• Illustrations
• Exercises/Case Studies
• Web Site
• www.rmi.gsu.edu/rmi/ faculty/klein/4700_Main_Menu.
  html

• University Library
• Center
• library
• databases
• Speakers

9
Readings

• Myhr Markham Insurance Operations, Regulation
  and Statutory Accounting (2 ed)
• Webb Insurance Operations
• Black Skipper Life Insurance
• Harrington Niehaus Risk Management Insurance
• Other

10
Web Site

• Announcements
• Syllabus
• Lecture Notes
• Readings
• Assigned Readings
• Other Readings
• Media Articles

• Exercises
• Case Studies
• Project Ideas
• Special Topics
• Products (Solicitations)
• Other

11
Grading

• Participation 10
• Exercises 15
• Project 20
• Midterm 25
• Final Exam 30

12
Exercises

• Risk Assessment and Pricing
• Claims Adjustment
• Reinsurance
• Financial Analysis

13
Project

• Financial analysis of insurance company or
  critical analysis of insurance management topic
  or business problem.
• Example Business Problem
• overview of principles issues
• case study for real or hypothetical problem
• Outline due 10/20
• Project due 12/3
• Consult with me
• Start early

14
Contacting Me

• Office Room 1118
• Telephone
• 404-413-7471
• 770-522-0451
• E-Mail rwklein_at_gsu.edu
• Office Hours 930-1030 am TR

15
What is expected of you?

• Keep up with the readings
• Active intellectual engagement
• Active class participation
• Analyze
• Use your brain!

16
Questions?