RM 320WRisk Management and Insurance

3 credits · Risk Management · Penn State

Goals and methods of risk management. Commercial insurance and alternative risk transfer (ART) methods in addition to the characteristics of insurance markets and intermediaries used by risk managers. This course covers the risk management process used by organizations to deal with the risks that they face with an emphasis on the types of risk commonly handled through the commercial insurance market. It addresses the costs and benefits of risk management, the goals of the process and the methods available to handle risks. The methods covered include both traditional and nontraditional ones including retention, commercial insurance, captive insurers, loss sensitive contracts, finite risk plans and securitization. The characteristics of the insurance markets and intermediaries used by risk managers are studied. These include insurance company organizational forms, operational structures, measures of performance, regulation and the role of brokers. The risks to organizations that are addressed include risks to employees, risks to customers, risks to shareholders and risks to third parties. The types of insurance covered include workers compensation, employment practices liability, products liability, general liability, directors and officers liability and environmental impairment liability. In addition, the failure of risk management during the recent financial crisis is analyzed. The course ends with a case study of risk management at Penn State University to give students a detailed perspective of the risk management program of a complex organization and to provide insight into how changes in the market environment can significantly affect such a program.