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Insurance And Risk Management Question Paper

Insurance And Risk Management

Course:Bachelor Of Commerce

Institution: Kca University question papers

Exam Year:2010

UNIVERSITY EXAMINATIONS: 2009/2010
SECOND YEAR EXAMINATION FOR THE DEGREE OF BACHELOR OF
COMMERCE
CMS 200: INSURANCE AND RISK MANAGEMENT (Day + Evening)
DATE: AUGUST 2010 TIME: 2 HOURS
INSTRUCTIONS: Answer question ONE and any other TWO questions
QUESTION ONE
a) Analyze the theory and practice of risk management in the Kenyan business environment
[12 Marks]
b) Risk is a common word used in every day conversation. Discuss the expert usage of this word in
Kenya. [10 Marks]
c) Risk management has a variety of objectives that can be classified into two, namely Pre-loss
objectives and the Post-loss objectives. List and explain FOUR pre-loss objectives that risk
managers may pursue in their organizations. [8 Marks]
QUESTION TWO
a) Distinguish between the insurance contract and a wagering contract. [10 Marks]
b) Provide the difference between the following terms as used in Risk management and insurance;
i. Insurance as a contract of adhesion and insurance as an aleatory contract.
ii. Risk avoidance and Risk Abatement
iii. Risk retention and risk Allocation
iv. Risk analysis questionnaire and risk forecasting
v. Hazard and Peril [10 Marks]
2
QUESTION THREE
a) Last Straw cases were among the land mark decisions that were made in determining the proximate
cause of a loss event. Briefly describe the context of this ruling citing the THREE main cases that
were used in this land mark decision. What is the relevance of this decision to insurers.
[10 Marks]
b) Risk management is a unique discipline with unique problems and challenges that are not normally
experienced in the normal sphere of management. Discuss FIVE of such unique risk management
problems facing practicing risk managers today. [10 Marks]
QUESTION FOUR
a) Discuss the historical development of insurance from as early as 3000 BC to around 1946
highlighting significant milestones along the way. [14 Marks]
b) Discuss how an insurance mechanism works, pointing out the relationship between the law of large
numbers and risk pools. [6 Marks]
QUESTION FIVE
a) Identify and explain FIVE principal methods organizations can use to reduce risks in these modern
times. [10 Marks]
b) Insurance companies normally are not willing to accept all the risks that other people may wish to
transfer to them. The risk that they accept must be within certain parameters. Identify and explain
FIVE of such parameters or characteristics [10 Marks]

Insurance And Risk Management Question Paper

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