MF0018 - INSURANCE AND RISK MANAGEMENT

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ASSIGNMENT

DRIVE	SUMMER 2017
PROGRAM	MBADS – (SEM 4/SEM 6) / MBAN2 / MBAFLEX – (SEM 4) / PGDFMN – (SEM 2)
SUBJECT CODE & NAME	MF0018 - INSURANCE AND RISK MANAGEMENT
SEMESTER	4
BK ID	B1816
CREDITS	4
MARKS	60

Note: Answer all questions. Kindly note that answers for 10 marks questions should be approximately of 400 words. Each question is followed by evaluation scheme.

Question. 1. Business organizations and individuals take insurance policies. These insurance policies help them to cover the losses in case of any emergency.

Explain how insurance works, the need for insurance and some examples.

Answer: Price risk is the risk of a decline in the value of a security or a portfolio. Price risk is the biggest risk faced by all investors. Although price risk specific to a stock can be minimized through diversification, market risk cannot be diversified away. Price risk, while unavoidable, can be mitigated through the use of hedging techniques.

Question. 2. An organization is a legal entity which is created to do some activity of some purpose. There are elements of a life insurance organization. Explain the elements of life insurance organization.

Answer: Elements of a Life Insurance Organization An ‘organization’ is a legal entity which is created to do some activity or to achieve some purpose. It is created under some law, which gives it a status and identity. Because of the identity, the organization is considered to be a person in law. Therefore, it can enter into contracts, be sued in courts, accumulate property and wealth, and do business, in the same manner as any individual can do. 

Important activities

Question. 3. Explain the term ‘Agent’, ‘Criteria for appointment of an Agent’ and ‘functions of an Agent’.

Answer: In India, section 182 of the Contract Act 1872 defines “Agent is a person employed to do any act for another in dealing with third parties”. An agent in commercial law (also referred to as a manager) is a person who is authorized to act on behalf of another (called the principal or client) to create a legal relationship with a third party. The principal has to perform his/her own part of the agency in primarily two ways. The principal has to pay or where necessary indemnify the agent for the services rendered or expenses incurred respectively.

Question. 4. To assess some cases, the underwriter needs more additional information; it can be procured from various sources. Explain them.

Answer: If you buy a house and then later default because you couldn’t afford the payment, the mortgage lender is stuck with the property. Since banks aren’t real estate agents, they don’t want the headache of dealing with bank-owned properties. For that matter, lenders are extra careful when approving applicants for a mortgage loan.

Question. 5. Briefly explain the marketing mix (7 P’s) for insurance companies.

Answer: The service marketing mix is also known as an extended marketing mix and is an integral part of a service blueprint design. The service marketing mix consists of 7 P’s as compared to the 4 P’s of a product marketing mix. Simply said, the

Question. 6. Explain the benefits of reinsurance. Elaborate on the application of reinsurance.

Answer: Benefits of Reinsurance

Reinsurance is an essential tool used for managing risk. Different from the common insurance that protects people from monetary loss, reinsurance offers protection to the main insurance company against financial loss. Find benefits of reinsurance discussed below.

1. Protects insurance companies

Just like other people who seek the protection of an insurance firm, all insurance companies also have to be protected. Reinsurance offers insurance companies protection through spreading risk amongst several insurance firms using a

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Send your semester & Specialization name to our mail id :

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