Welcome to module RSK4803
This module examines how to analyse, measure and manage the different dimensions of risk financing as part of enterprise risk management. The course will analyse the different sources of risk financing aligned with the risk appetite of the enterprise, including capital, retained income, contingency loans, captives, risk transfer and alternative risk transfers. The course also deals with risk financing strategies to optimise risk financing of the enterprise.
All enterprises are exposed to risk and must finds ways to finance the financial consequences of the risk. Traditionally, enterprises focused on insurance to transfer risk, but even when the risk is transferred, insurers cap their exposure via limits and set risk mitigation requirements for certain risks. Insurance policies are further in most instances structured that claimants must pay the first loss, which implies that a certain component of the risk is retained. The amount of risk that the enterprise retains, or transfers should be aligned with its risk appetite and constraints of the enterprise. As can be seen from the discussion, risk financing is significantly more complicated than only purchasing insurance.
The alternatives available to finance risk are evaluated in the context of the objectives of the entity and should therefore not be isolated from general finance and investment principles. Risk finance can be described as the process that an enterprise uses to ensure that adequate funds are available to survive a material unexpected loss that arose from a deliberately retained risk.
Please note that this module is offered fully online. You, therefore, need to go online to find the study material and to complete the learning activities for this course. Go to the website: https://my.unisa.ac.za. Log in with your student number and password. You will see the RSK4803-20-Y1 module site in the row of modules at the top of the webpage.
It is essential that you register on myUnisa and access the module site regularly. You must be registered on myUnisa to be able to access the learning material and the assignment questions, to submit your assignments, to gain access to various learning resources and to “chat” with a lecturer.
All the best with your studies.
Dr J van Huyssteen
School Economics and Financial Services
Department of Finance, Risk Management and Banking
Simon Radipere Building 5-117
Tel: 012 429 2576
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