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Objectives
The course provides advanced knowledge about:
- contribution of technical risks in the industrial plants to the business continuity,
- insurance aspects,
- company operation and asset management and
- handling an insurance contract.
Target Attendees / Participants
Students of Steinbeis Master of Business Administration
Course Content by Units
Unit 1: Introduction, fundamentals of corporate finance
- Introduction to corporate finance
- The value of money: time and risk
- Net present value rules
- Alternative decision rules (IRR, BE, FV)
- Quantifying risk and expected return
- Excursus: Sensitivity analysis
Unit 2: Modeling and estimating of risk: Insurance vs. financial hedging
- Insurable and non-insurable events
- Premise and the law of large numbers
- Motivation: Computation of premise for life insurance
- Liability and commercial property insurance
- Excursus: Underwriting and insurance contracts
- Case studies & External example (will be brought in directly by industry): Insurance of industrial objects
Unit 3: Financial hedging of commodity and currency risk
- Toward an Integrated risk model
- Binomial models and Black-Scholes approach to the value options in an arbitrage-free-world
Unit 4: Review of main course issues and preparation for the final exam
Teaching Methods
The course includes:
- introductory note explaining the aim and structure of the course, as well as the used methodology,
- ex cathedra lecturing following the defined units,
- number of computational examples for each unit,
- one case study from an insurance company and
- one individual and several collective exercises.
Literature
- Textbook:
Business continuity risks & Insurance
Version 2, June 2010
- Transparencies:
Unit 1: Introduction, fundamentals of corporate finance
Unit 2: Intro - quantitative risk management
Unit 3: Modeling and estimating of risk: Insurance vs. financial hedging
Unit 4: Financial hedging of commodity and currency risk
Unit 5: Additional issue -
- Certification material, version 2, March 2010
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