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Bmgt 211- Introduction To Risk And Insurance Question Paper
Bmgt 211- Introduction To Risk And Insurance
Course:Bachelor Of Commerce(Bcom) ()
Institution: Kabarak University question papers
Exam Year:2010
KABARAK
UNIVERSITY
UNIVERSITY EXAMINATIONS
2009/2010 ACADEMIC YEAR
FOR THE DEGREE OF BACHELOR OF COMMERCE
COURSE CODE: BMGT 211
COURSE TITLE: INTRODUCTION TO RISK AND INSURANCE
STREAM:
Y2S2&Y2S1.
DAY:
TUESDAY.
TIME:
3.00 – 5.00P.M.
DATE:
10/08/2010
INSTRUCTIONS.
Answer questions ONE and any other two questions
PLEASE TURNOVER
Page 1 of 3
QUESTION ONE
a) i. Distinguish between enterprise risk management and project risk management (4mks)
b) ii. You have been hired as a project manager by a Manufacturing Company based in Nakuru. Describe
Five risk management activities that you would be expected to undertake. (6mks)
Distinguish between risk management activities at the strategic and the operational levels in an
organization (4mks)
a) For insurance to operate effectively, there are certain principals on which it is based. Describe these
principals (10mks)
b) David is a businessman who operates a transport business. His knowledge of insurance products is
limited to motor insurance. He is contemplating taking a life assurance cover, but he is hesitant because
of his minimal understanding of how insurance works. Explain to him the peculiar features of life
assurance. (6mks)
(30maks)
QUESTION TWO
a) Dan recently received an inheritance from his father that comprised real Estate and some businesses
which are operation. He does not truly understand how insurance operates and his father also appears to
have scanty information on insurance. Explain to him the unique features of Insurance contracts.
(12mks)
b) Joyce has been running a successful salon business for the last ten years. However she in now alarmed
by the many salons that have been established near her business premises. Moreover some of her best
employees have been hired and offered higher salaries to work for her new competitors. Due to the fear
of a decline on profitability of her business due to competition, she is contemplating insuring her
business against possible decline in profitability. Advice her on the requisites of insurability (8mks)
(20marks)
QUESTION THREE
Page 2 of 3
a) Matata bus services has been in public transport for the last six years. They operate a fleet of ten buses.
For the period they have been in operation, none of their vehicles has been involved in an accident
yet they have been paying for insurance for their vehicles . In a recent meeting, the management was
wondering whether insurance companies have any justification to continue collecting insurance
premiums from them. Advice the management on the social economic role of insurance.
(10mks)
b) You have been hired by the above bus Company as a risk management consultant to assist in the
identification and control of risks their company is facing.
i. Highlight five major risks facing the bus Company (5mks)
ii. Recommend practical control measure with specific reference to reduction and transfers (5mks)
(20 Marks)
QUESTION FOUR
a) There are many risks to which businesses are exposed. Explain the main classifications of risk
highlighting which ones can be dealt with through insurance. (10mks)
b) Alex graduated from Kabarak University last year. He has secured employment with a cooking oil
manufacturing Company in Nakuru. The Company has in the recent years been incurring huge expenses
due to occurrence of unforeseen risks. Explain five systematic approaches to risk identification which he
can use to ensure that all the possible risks facing the Company are identified. (10mks)
(20 marks)
QUESTION FIVE
Describe the main steps of risk management process in an organization. (20 marks)
Page 3 of 3
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