Study-Unit Description

Study-Unit Description


CODE INS1002

 
TITLE Applied Behavioral Risk Management

 
UM LEVEL 01 - Year 1 in Modular Undergraduate Course

 
MQF LEVEL 5

 
ECTS CREDITS 4

 
DEPARTMENT Insurance and Risk Management

 
DESCRIPTION This study-unit provides a comprehensive treatment of the key behavioural science issues surrounding risk management. Since the 2008 global financial crisis, academics and policy-makers have increasingly acknowledged that investors and customers alike do not behave according to standard models of risk management and investment based on rational choice theory. Behavioural risk management recognises these realities by incorporating insights from psychology and neurobiology in order to provide a more realistic assessment of people's behaviour under risk.

The study-unit will cover areas such as The Nature of risk, Risk versus perception of risk, Risk management practices, Risks and behavior, The risk culture, Risks and decision making, Risk and organisational objectives, Unintended consequences of risk management, Establishing organisation’s risk position, Risk leadership: creating a climate for risk management, Risk and financial investments (type of risks, measure to mitigate, behavioural finance, ART ) andRisk in real life situations (use of real incidents to learn how to identify and deal with risk and evaluating outcome).

Study-unit Aims:

- To provide a holistic analytical framework that encompasses the most salient insights from behavioural science in order to explain behaviour under risk, and the associated implications for risk management;
- To provide students with an opportunity to understand how behavioural risk management can be used by businesses and policymakers alike in their daily operations within the insurance and broader financial services sector.

Learning Outcomes:

1. Knowledge & Understanding
By the end of the study-unit the student will be able to:

i) appreciate how the key psychological and neurobiological tenets of behavioural science can deepen our understanding of risk and how people behave when faced with risky situations;
ii) demonstrate an understanding of how the insights gleaned from behavioural science are being used by leading practitioners within finance and insurance markets around the world;
iii) apply these insights to various problems related to risk management, from the design of insurance products to financial market regulation.

2. Skills
By the end of the study-unit the student will be able to:

i) utilise a range of quantitative and qualitative skills in order to analyse behaviour under risk and assess any systematic deviations from rational choice theory;
ii) read, interpret and understand the latest developments in behavioural risk management published in leading academic journals within the field;
iii) apply the concepts learned to undertake their own independent research, as well as to supplement their understanding of risk management in their future careers.

Main Text/s and any supplementary readings:

Main Text:

- Shefrin, H., 2016. Behavioral Risk Management, 1st Edition (Palgrave-Macmillan)

 
STUDY-UNIT TYPE Lecture and Tutorial

 
METHOD OF ASSESSMENT
Assessment Component/s Assessment Due Sept. Asst Session Weighting
Assignment SEM2 Yes 100%

 
LECTURER/S Sharon Seychell
Jonathan Spiteri (Co-ord.)

 

 
The University makes every effort to ensure that the published Courses Plans, Programmes of Study and Study-Unit information are complete and up-to-date at the time of publication. The University reserves the right to make changes in case errors are detected after publication.
The availability of optional units may be subject to timetabling constraints.
Units not attracting a sufficient number of registrations may be withdrawn without notice.
It should be noted that all the information in the description above applies to study-units available during the academic year 2024/5. It may be subject to change in subsequent years.

https://www.um.edu.mt/course/studyunit