Risk and Capital Management in Insurance Companies
Integrated course, 3.00 ECTS
This course deepens the understanding of risk management as a central driver of success of insurance companies. The connection between risk and return in the insurer's core business is established and the impact of regulation is discussed in detail. In a case study, students construct a model to compute the capital requirements of an insurance company, which will allow them to test the impact of various risk/return factors on financial results.
The core contents of this course include:
 Types of risk in insurance;
 Financial reporting, supervisory and regulatory requirements;
 Connection between portfolio risk and capital requirements;
 Detailed discussion of regulatory regimes (e.g. Solvency II);
 Design and implementation of a risk-based capital model (e.g. Solvency II);
 Risk and capital budgeting in insurance companies.
Optional contents can include:
 Control of operational and other risks;
 Risk management through reinsurance and risk securitisation.
Successful participants in this module have a thorough understanding of the integrated and indicator-based management of insurance companies. In particular, they are conscious of the requirements and challenges in the areas of risk and capital management and can incorporate these aspects into their decision making skills at the enterprise level. This supports a holistic understanding of value creation in the insurance business. In the following modules this knowledge will be applied when discussing insurance products and sales strategies. Additionally, current regulatory frameworks will be discussed in detail.
Post completion of this module, students will have a holistic understanding of the insurance sector, practical aspects of the management of insurance companies and the evaluation of single business areas. During a project students will be able to strengthen their social, team and presentation skills.
Recommended or required reading and other learning resources / tools
References: Briys/de Varenne (2001): Insurance: From Underwriting to Derivatives, Wiley. Hallmann et al (2008): Steuerung von Versicherungsunternehmen, Schäffer-Poeschel. Nguyen/Romeike (2013): Versicherungswirtschaftslehre, Springer. Noack et al (2010): 100 Versicherungskennzahlen, cometis. Romeike (2003): Balanced Scorecard in Versicherungen, Gabler. Romeike et al (2008): Risikomanagement im Versicherungsunternehmen, Wiley.
Academic journals: -
Mode of delivery
3 ECTS: ILV
Prerequisites and co-requisites
Modules IFG, FIR, VBU, AUR, QFM (1, 2, 3, 7, 8)
Assessment methods and criteria
ILV: final exam, assessment of active course participation