Lectures outline
1. Microeconomics of Insurance I - Insurance demand. The theory of insurance demand - basic model. The expected utility maximisation hypothesis. Alternatives to expected utility theory. Corporate demand for insurance (reasons for corporate demand for insurance, advantages of insurance, empirical studies of corporate demand for insurance).
2. Insurance company as a business entity. The theory of insurance company growth (objective of the insurance company). Insurance company business organisation. Insurance technology. Economic and legal background of insurance company operations in the Czech Republic.
3. Insurance marketing I - distribution channels of insurance products. The overview of distribution channels for insurance products. Insurance agents and brokers in the Czech Republic. New product development.
4. Insurance marketing II - customer relationship management. CRM information system. Measurement of customer satisfaction. Data mining technics in insurance.
5. Insurance company liability management. Technical provisions. Financial management for life and non-life insurance company. Guidelines on the valuation of technical provisions.
6. Insurance company asset management. Investment activities of insurance companies. Bond valuation techniques. Investment portfolio optimisation with constraints.
7. Insurance company financial analysis. Information sources for financial analysis of insurance companies. Income statement analysis. Measures of return. Factors influencing insurance company returns. Underwriting cycle.
8. Asset Liability Management in insurance. Overview of ALM methods in insurance. Duration and cash flow matching. Dynamic financial analysis. Evaluation of ALM results via fund transfer pricing. ALM as a part of the insurance company strategic management.
9. Microeconomics of Insurance II – insurance supply. Traditional premium calculation. Financial models of insurance pricing (insurance CAPM, option pricing). Empirical evidence on the actual behaviour of insurance companies. Economies of scope and economies of scale in the supply of insurance. Applications of data envelopment analysis for the analysis of insurance market efficiency.
10. Insurance company solvency and insurance regulation under Solvency II. Financial stability of the insurance company. Solvency of the insurance company. Solvency tests. Main Solvency II regulations.
11. Market discipline in insurance. Corporate governance and compliance in insurance. Market failures and asymmetric information in insurance market. Insurance company rating (classification, methodology). Insurance company auditing (types, advantages and risks).
12. Insurance company valuation. Relative valuation techniques. Embedded value calculations.