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Bbm 224: Principles Of Risk Management &Amp; Insurance Question Paper

Bbm 224: Principles Of Risk Management &Amp; Insurance

Course:Bachelor Of Business Information Technology

Institution: Mount Kenya University question papers

Exam Year:2011

Mt Kenya University
UNIVERSITY EXAMINATIONS 2010/2011
SCHOOL OF APPLIED SOCIAL SCIENCES
DEPARTMENT OF BUSINESS AND SOCIAL STUDIES
BACHELOR OF BUSINESS MANAGEMENT
UNIT CODE: BBM 224: TITLE: PRINCIPLES OF RISK MANAGEMENT
& INSURANCE
TIME 2HRS
Instructions
Answer Question ONE which is Compulsory and any other TWO questions

Question One

a) Explain the characteristics of an insurable risk (10 marks)

b) Explain the objectives of risk management both before and after a loss occurs
(5 marks)

c) How does fundamental risk differ from particular risk? (5 marks)

d) With help of illustrations, explain; physical hazard, moral hazard, morale hazard
and legal hazard (10 marks)

(30 marks)

Question Two

Briefly explain the following terms as used in insurance

a)Coinsurance
b)Deductibles
c) Endorsement and Riders
d) Exclusions
e) Definitions (Each 4 marks)

(20 marks)

Question Three

a) What are risk maps? (5 marks)

b) Explain various information-gathering techniques (10 marks)

c) Explain social and economic burden of risk to the society (5 marks)

(20 marks)

Question Four

a) Differentiate between a direct loss and an indirect or consequential loss
(5 marks)

b) Of 500 employees of a firm 280 have a life insurance policy ,400 have a medical
insurance cover and 200 participate in both programmes

i. What is the probability that a randomly selected employee will be a
participant in atleast one of the two programmes? (4 marks)

ii. Determine the probability that an employee will be a participant in the life
insurance plan given that he/she has a medical insurance coverage
(6marks)

c) What factors are considered in selecting a method for risk identification?
(5 marks)

Question Five

a) Explain any Five functions of a risk manager (10 marks)

b) With the help of examples differentiate between pure and speculative risks
(10 marks)

Bbm 224: Principles Of Risk Management &Amp; Insurance Question Paper

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