Insurance and risk management

Insurance is one of the tools available to mitigate risk. It enables one to hedge against the risk of a contingent, uncertain loss. It is the equitable transfer of the risk of a loss from one entity to another in exchange for payment and was practised by Chinese and Babylonian traders as long ago as the third millennia BC.

Insurance can have significant effects on society through the way it changes who bears the cost of losses and damages. Insurance companies world-wide are often under media scrutiny for the manner in which they handle claims, particularly those associated with major natural disasters.

Risk management is the identification, assessment, and prioritisation of risks (defined in ISO 31000 as the effect of uncertainty on objectives) followed by coordinated and economical application of resources to minimise, monitor, and control the probability and/or impact of unfortunate events or to maximise the realisation of opportunities. Risk management’s objective is to assure uncertainty does not deflect the endeavour from the business goals.

Insurance works by pooling risk - a large group of people who want to insure against a particular loss pay their premiums into what we will call the insurance bucket, or pool. Because the number of insured individuals is so large, insurance companies can use statistical analysis to project what their actual losses will be within the given class.

They know that not all insured individuals will suffer losses at the same time or at all. This allows the insurance companies to operate profitably and at the same time pay for claims that may arise. For instance, most people have vehicle insurance but only a few actually are involved in an accident. You pay for the probability of the loss and for the protection that you will be paid for losses in the event they occur.

Life is full of risks - some are preventable or can at least be minimised to acceptable levels, some are avoidable and some are completely unforeseeable. Risk is anything that matters. It can be a danger and an opportunity. What's important to know about risk when thinking about insurance is the type of risk, the effect of that risk, the cost of the risk and what you can do to mitigate the risk.

To prepare yourself for a dynamic career in the ever growing Financial Services industry. Learn about different types of risks, risk identification, risk measurement, risk mitigation and risk transfer, the various jobs available within the industry and prepare the road to join the number of professionals and specialists in the area.

The general aim of the Bachelor of Commerce degree in Insurance, the B.Com. (Hons) Insurance and Risk Management, the M.A. Insurance and Risk Management and the M.Sc. Insurance and Risk Management will provide the formal educational requirements for students to function competently in professional, specialist and managerial positions in both the private and public sectors.

Insurance and risk management touch every aspect of daily life and business. When we wake up in the morning, we accept risk of potential injury to others and ourselves. When we operate our business, we encounter risks to our business property, reputation, and livelihood. It is what allows our lives and the economy to operate smoothly in spite of the risks and the reality that 'bad things' will occasionally happen and what makes us complete when things go wrong in both our personal and business lives and ensures business continuity.

The Insurance and Risk Management programme is revised each year to ensure that it remains relevant and up-to-date with recent developments in the financial markets. It provides students with an excellent background with which to proceed to the MA in Insurance and Risk Management offered by the department or any other M.Sc., M.A. or M.B.A. programmes offered both locally and abroad. It will help prepare you for a number of different jobs including becoming an actuary, an agent or broker, a claims adjuster, a customer service representative, a field representative, a loss control specialist, an underwriter  a risk manager and internal auditor, compliance Manager, portfolio manager, portfolio analyst, portfolio advisor, etc.

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https://www.um.edu.mt/fema/insurance/aboutus/insurance-risk