Insurance companies invest money
set aside to pay future claims to policyholders in stocks, bonds, real estate,
and other assets. Thus insurance companies seek mostly individuals with
knowledge in asset management. Several insurance companies hold large portfolios
of bonds (also called fixed income securities). Knowledge of managing fixed
income portfolios is a good skill for someone interested in a career in a large
insurance company. Insurance companies also employ actuaries who are
professionals with knowledge of statistical models to assess risk. The
Department of Mathematics at the University of Illinois has a strong
program in actuarial science.
A typical entry point is that of
a fixed income analyst. These professionals focus on the analysis of corporate,
government, and municipal fixed income securities. They specialize in specific
industries (for example, telecommunications and automotive) or types of
securities (for example, municipal securities) and provide recommendations for
investments to senior portfolio managers.
Knowledge of investments (and
particularly fixed income portfolios) is a strong attribute for successful
placement. Very good writing and communication skills are also desired by
employers. Pursue of the CFA charter (for example, taking the CFA I exam) is
also a strong qualification for these positions.
Finance 431: Property-Liability Insurance
Examines in detail the functions of property-liability insurers, including marketing, underwriting, claims, ratemaking and administration, and the major current issues facing this industry.
Finance 432: Managing Financial Risk for Insurers
Introduces basic concepts in financial economics used in the analysis and management of financial risks, with an emphasis on the applications by insurers and pension plans; topics include decision making under uncertainty, economic statistics, deterministic and stochastic interest rate models, derivative securities, valuation, binomial and option pricing models.
Finance 433: Corporate Risk Management
Case study course examining how corporations deal with pure risk.
Finance 434: Employee Benefit Plans
Studies the purpose, structure, and financial aspects of employee benefit plans, including pensions, health insurance, life insurance, and disability plans.
Fin 580 ERM: Enterprise Risk Management
Enterprise Risk Management (ERM) is the application of the basic risk management principles to all risks facing an organization; ERM integrates hazard, financial, strategic and operational risks under a single framework; ERM is becoming an important issue partly as the result of the Sarbanes-Oxley Act of 2002 that puts greater responsibility on the Board of Directors for managing all of an organization’s risks; this course will present the legal and regulatory environment that sets the state for ERM, cover the technical tools used in risk analysis, examine data integration processes and show how risk measures relate to strategic and tactical business decisions.