LV EN RU DE FR

Insurance and Risks

Course developer

Prior knowledge

Ekon2109, Macroeconomics

Ekon3091, Management Accounting

Ekon4102, Financial Accounting

Mate2023, Mathematics for Economists

VadZ3029, Analysis of Economic Activities

Course abstract

Insurance is an important part of the financial system, which provides coverage for various economic, climatic, technological, political and demographic risks, reducing insecurity for individuals and reducing the impact of unexpected and adverse event and ensuring successful operations and development. The study course allows students to acquire basic knowledge on insurance principles, types, opportunities and risks, insurance fund activities and legal and regulatory enactments regulating the insurance market.

Learning outcomes and their assessment

1. Knows and understands the nature of the insurance sector and the specifics and risks of the services provided. Familiar with insurance services and the process of calculating insurance premiums and claims - independent work.
2. Knows the terminology of insurance industry, types of risks and the legal and regulatory enactments of the insurance sector - discussion in class, test, seminar.
3. Knowledge and understanding on insurance services, calculation of premiums and claims - test with calculations.
4. Ability to determine and calculate insurance premiums and claims. Students are able to analyse the results, understand the causes and draw conclusions. Understands the essence of insurance sector - test with calculations, calculations in classes.
5. Able to choose the most appropriate insurance service, solve various tasks, collaborate in a group with colleagues to obtain the necessary information and analyse the services and activities of the selected insurance company - group work, discussion classes.
6. Able to analyse legal and regulatory enactments, compare insurance services and justify the choice made - group work, seminar.
7. Able to plan tasks responsibly - independent work.
8. Able to engage and take responsibility for group performance and analysis. Students are able to present the results of independent work - group work, report and presentations.
9. Ability to apply in practice the acquired theoretical knowledge and practical skills on the activities of insurance companies, risks, provided services and legal and regulatory enactments regulating the insurance sector - independent work, group work, tests, presentations.

Course Content(Calendar)

1. History of insurance market development (lectures - 2 h)
Concept of insurance. History and development of insurance in Latvia. Participants of the insurance market.
2. Economic nature of the insurance market. Risk theory in insurance (lectures - 1 h, practical work - 1 h)
Insurance - transfer of risk from the insured to the insurer. Risk classification. Risk underwriting.
3. Legal and regulatory enactments regulating the insurance activities (lectures - 1 h, practical work - 2 h)
Law on Insurance and Reinsurance. Insurance Contract Law. Insurance and Reinsurance Distribution Law. Compulsory Civil Liability Insurance of Owners of Motor Vehicles Law. Rules of the Financial and Capital market Commission.
4. Characteristics and development trends of the insurance market (lectures - 1 h, practical work - 2 h)
Characteristics of the insurance market. Trends in the insurance market and its results. Insurance coverage and methods. Structure of insurance companies. Personal insurance. Property insurance.
5. Life insurance market characteristics (lectures - 1 h, practical work - 2 h)
Life insurance market characteristics, its development. The activities of major insurance companies in this market, their characteristics. Types of products offered by life insurance companies. Life and accident insurance offers: health insurance policies.
6. Characteristics of the non-life insurance market (lectures - 2 h, practical work - 2 h)
Characteristics and forecasts of the non-life insurance market. Largest insurance companies operating in this market, their characteristics.
7. Property insurance and its risks (lectures - 2 h, practical work - 1 h)
Risks influencing the insurance premiums. Types of property insurance products offered by different insurance companies in Latvia.
8. Types of civil liability insurance (lectures - 2 h, practical work - 1 h)
Limits of liability and procedure for payment of losses. Procedure for calculating the premium. Insurance of motor vehicles. Compulsory civil liability insurance of owners of motor vehicles, its regulatory basis. Voluntary insurance of motor vehicles.
9. Reinsurance, co-insurance and self-insurance (lectures - 1 h, practical work - 1 h)
Necessity for reinsurance, its regulation. Reinsurance in Latvia and its classification. The nature of co-insurance, its application in the insurance market. Self-insurance, its advantages and disadvantages.
10. Insurance of economic risks (lectures - 2 h, practical work - 1 h)
Classification of business insurance. Business insurance products offered by different insurance companies in Latvia. Insurance of agricultural, cargo insurance, travel insurance.
11. Evaluation of insurance company performance indicators (lectures - 1 h, practical work - 3 h)
Determination of insurance premium and analysis of the number of cases of insurance indemnity payments. Calculation and analysis of risk coefficients. Loss rate. Expenditure ratio. Combined indicator. Return on investment.

Requirements for awarding credit points

1. Legal and regulatory enactments regulating the insurance sector - independent work, seminar (15%).
2. Insurance terminology - test (20%).
3. Comparison of services provided by three insurance companies – work in groups, presentation (15%).
4. Insurance services, calculation of premiums and claims – test with calculations (20%).
5. Analysis of services and activities of the selected insurance company. Presentation of a report - work in groups, report, presentation (25%).
6. Activity in classes (5%).
At the end of the study course, a test with a mark consisting of a cumulative assessment of the learning outcomes (100%).

Description of the organization and tasks of students’ independent work

Getting ready for practical assignments, presentations and tests. Analysis of legal and regulatory enactments regulating the insurance sector, study and comparison of services provided by insurance company as well as individual or group analysis (report) on the operation of the f selected insurance company and report presentation.

Criteria for Evaluating Learning Outcomes

All assignments shall be completed. Every assignments is graded. The evaluation of the study course depends on the evaluation of independent and practical assignments (tasks), 10% corresponds to one point on a 10-point assessment scale.

Compulsory reading

1. Best A.M. Understanding the Insurance Industry: an Overview for Those Working with and in one of the World’s Most Interesting and Vital Industries. Best Guide, 2019. 63 p.
2. Graudiņa A. Apdrošināšanas pamati. Rīga: LU Akadēmiskais apgāds, 2010. 150 lpp.
3. Apdrošināšana: pamatprincipi un prakse. Sast. D. Blends. Rīga, 1995. 400 lpp.
4. Alfejeva J. Apdrošināšanas tiesības: monogrāfija. Rīga: Turība, 2017. 173 lpp.
5. Rejda G., McNama M. Principles of Risk Management and Insurance. 13th edition. Harlov: Pearson, 2016. 254 p.
6. Rubanovskis A. Apdrošināšanas pamati: teorija, plānošana, problēmas. Rīga: EKA, 2004. 201 lpp.
7. Vaughan M. J., Vaughan T.M. Fundamentals of Risk and Insurance. 11th edition. Hoboken, New Jersey: John Wiley & Sons, Inc., Wiley, 2014.620

Further reading

1. Apdrošināšanas un pārapdrošināšanas likums: LR likums [tiešsaiste]. Pieejams: https://likumi.lv/ta/id/274969-apdrosinasanas-un-parapdrosinasanas-likums.
2. Apdrošināšanas un pārapdrošināšanas izplatīšanas likums: LR likums [tiešsaiste]. Pieejams: https://likumi.lv/ta/id/306711-apdrosinasanas-un-parapdrosinasanas-izplatisanas-likums.
3. Apdrošināšanas līguma likums: LR likums [tiešsaiste]. Pieejams: https://likumi.lv/ta/id/299053-apdrosinasanas-liguma-likums.
4. Sauszemes transportlīdzekļu īpašnieku civiltiesiskās atbildības obligātās apdrošināšanas likums: LR likums [tiešsaiste]. Pieejams: https://likumi.lv/doc.php?id=87547.
5. Graudiņa A. Apdrošināšanas problēmas un perspektīvas Latvijas lauksaimniecībā: promocijas darba kopsavilkums. Jelgava: LLU, 2017. 87 lpp.
6. Ieviņš U. Apdrošināšanas pamati. Rīga: Latvijas Vēstnesis, 2017. 70 lpp.
7. Leonoviča L. Uzņēmējdarbības apdrošināšana. Rīga: RTU, 2002. 190 lpp.
8. Thoyts R. Insurance Theory and Practice. Routledge, 2010, p. 344.
1. Tihomirova J. Apdrošināšanas pamati. Rēzekne: Rēzeknes Augstskola, 2004, 72 lpp.
9. Sūniņa-Markēviča K. Apdrošināšana. Rīga: Junior Achievement. Latvija, 2003. 143 lpp.

Periodicals and other sources

1. Business Week [tiešsaiste]. Bloomberg L.P. Businessweek ISSN 0007-7135. Pieejams: https://www.bloomberg.com/businessweek.
2. Dienas Bizness: nedēļas laikraksts: Latvijas biznesa avīze. Rīga: Diena: Dagens Industri, 2005.
3. Finanšu un kapitāla tirgus komisija [tiešsaiste]. Pieejams: http://www.fktk.lv/lv/tirgus-dalibnieki/apdrosinasanas-sabiedribas.html.
4. Latvijas Apdrošinātāju asociācija [tiešsaiste]. Pieejams: https://www.laa.lv/.
5. Latvijas Transportlīdzekļu apdrošināšanas birojs. [tiešsaiste]. Pieejams: https://www.ltab.lv/.
6. Apdrošināšanas sabiedrību mājaslapas.

Notes

Restricted elective study course for the specialisation direction “Accounting and Finance” of the academic Bachelor study programme “Economics”