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1. Dear students get fully solved assignments
Send your semester & Specialization name to our mail id :
help.mbaassignments@gmail.com
or
call us at : 08263069601
ASSIGNMENT
DRIVE WINTER 2015
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.
Q.1 What do you understand by the term risk and uncertainty? Explain different types of risk
facing business and individuals.
Ans : Risk and uncertainty :
“Risk” and “uncertainty” are two terms basic to any decision making framework. Risk can be
definedasimperfectknowledge where the probabilities of the possible outcomes are known, and
uncertaintyexistswhen these probabilities are not known . A more common usage of these terms
would state uncertainty as imperfect knowledge and risk as uncertain consequences. . If a person
says“ I am uncertainaboutthe weathertomorrow,: this would be a value-free statement implying
imperfect knowledge about the future. If this same person says “ I am planning a picnic for
tomorrow and there is a risk of rain”, now he or she is
Q.2 Identify the role of insurance in managing risk financing. Explain the importance of insurance
transaction. Discuss in different perspectives of insured and insurer
Ans : Role of insurance in managing risk financing :
Risinginsurance premiumsandthe occasional inabilityto obtain coverage at any cost have changed
the traditional role of insurance.Obtainingcoveragefor everyinsurable risk isbeing replaced by the
risk management concept. Risk management, which includes insurance coverage, is intended to
minimize the costsassociatedwithassumingcertaintypesof risk and providing prudent protection.
It deals with pure risks that are characterized by chance occurrence and that may only result in a

2. financial loss. Risk management does not address speculative risks that afford the opportunity for
either financial gain or loss.
Introduction of insurance transaction :
It isa termusedto refertothe actual conductingof insurance business,for example , soliciting and
negotiating contracts. The definition of this term can vary from
Q.3 Explain the reasons that have been responsible for the privatization of the insurance industry
in the country. Identify the problems and prospects of public insurance enterprises.
Ans : Privatization of the insurance industry :
Over the past century, Indian insurance industry has gone through big changes. It started as a fully
private system with no restriction on foreign participation. After the independence, the industry
went to the other extreme. It became a state-owned monopoly. In 1991, when rapid changes took
place in many parts of the Indian economy, nothing happened to the institutional structure of
insurance: it remained a monopoly. Only in 1999, a new legislation came into effect signalling a
change in the insurance industrystructure.We examine what might happen in the future when the
domestic private insurance companies are allowed to
Q.4 Explain the creation and application of insurable interest. Give the differences between
wagering and insurance.
Ans : Creation of insurable interest :
Insurable interestexistswhenaninsuredpersonderivesafinancial orotherkindof benefit from the
continuous existence of the insured object (or in the context of living persons, their continued
survival). A person has an insurable interest in something when loss-of or damage-to that thing
wouldcause the persontosuffera financial lossorotherkindof loss. Typically, insurable interest is
established by ownership, possession, or direct relationship. For example, people have insurable
interests in their own homes and vehicles, but not in their neighbours' homes and vehicles, and
certainly not those of strangers. The "factual expectancy
Q.5 Give the important activities of life insurance company. Describe the important historical
milestones in the development of the life insurance sector in India.
Ans : Important activities of life insurance company :
Financial market activity of life insurance companies :
An importantdevelopmentinthe financial marketsof several industrial countries in recent decades
has been the growth of long-term institutional investors and their increasing domination of the
capital market. Aided by both demographic and financial market trends, it seems likely that this

3. developmentwill continue in the future. However, the nature and the importance of this change -
including the global dimensions of the trend towards institutionalisation - have often been
overlooked or underestimated by market commentators and observers. Even fund managers
themselvesare oftenunaware of the conditions faced by institutional investors in other countries.
Insurance transfers the financial effect of fortuitous losses. A financial organization's primary
defences against loss are adequate internal controls
Q.6 Give short notes on :
Pricing objectives.
Pricing elements.
Rate computation
Ans : Pricing objectives:
Pricing objectives or goals give direction to the whole pricing process. Determining what your
objectives are is the first step in pricing. When deciding on pricing objectives you must consider:
1) the overall financial, marketing, and strategic objectives of the company;
2) the objectives of your product or brand;
3) consumer price elasticity and price points; and
4) the resources you have available.
Dear students get fully solved assignments
Send your semester & Specialization name to our mail id :
help.mbaassignments@gmail.com
or
call us at : 08263069601