Overview
LOMA 308 — The Business of Insurance: Applying Financial Concepts presents basic economic, financial, and business concepts and practices related to insurance company management, operations, solvency and profitability. The course utilizes extensive examples and exercises that enable learners to understand and apply important financial concepts and principles in their own work environments.
Learning Outcomes
- Describe the basic types of financial products and identify the financial needs these products are designed to address
- Explain the steps in the control process and describe the important control mechanisms insurance companies use to measure, evaluate, and improve their operational performance
- Describe the major categories of life insurer investments and explain how insurers use the required rate of return, the risk-free rate of return, and the risk premium to evaluate these investments
- Describe how insurers determine the values for a product’s cost of benefits, operating expenses, and investment earnings and how they evaluate product performance
- Describe how insurers use cost-benefit analysis, rightsizing, outsourcing, remote work arrangements, and information technology to manage general and administrative expenses
- Explain how insurers use information technology to manage and improve the customer experience and key business processes
- Perform present value calculations, explain how the present value of an annuity is calculated, and describe insurer applications of present value
- Describe the ratio-based systems used by regulators and rating agencies to monitor and evaluate insurance company solvency and profitability
Module 1: The Economy
The Economy
Measuring Economic Performance
The Business Cycle
How the Economy Affects Financial Institutions
Financial Institutions in the Economy
Needs Covered by Financial Products and Services
Changes in Price Levels
Fiscal Policies
Monetary Policies
Module 2: The Insurance Industry
Insurance Company Structure and Management
Insurance Company Structure
Managing Insurance Business
Managing Company Solvency & Profitability
Basic Risk Management Concepts
Managing Company Solvency
Managing Company Profitability
Managing Risks
Managing Enterprise Risks
Achieving Operational Efficiency
Insurance Company Expenses
Managing Expenses
Managing Sales Commissions
Improving Operational Efficiency
Information Management
Information Technology
Information Management Systems
Business Process Management Systems
Data Analytics
Data Security
Module 3: Financial Concepts
The Time Value of Money
Financial Reports and Plans
Financial Reports
Financial Plans
Collecting, Analyzing, and Reporting Financial Information
Using Sample Data
Sampling Methods
Avoiding Sampling Bias
Data Analysis/Ratios
Presenting Data Visually/Charts/Other
Avoiding Deceptive Uses of Visual Presentations