Ateneo - UPO

The Course is organized into two parts, respectively focused on Banking
and Insurance, each comprising 15 hours of classroom-taught lessons.
The first part of the Course, focused on Banking aims at providing
participants with an in-depth insight about the nature and structure of a
financial system, in order to develop an understanding 1) of the different
financial needs and funding options available to firms and non-financial
institutions, and 2) of basic functioning of banks and other major
typologies of financial institutions. Methodologies to assess borrowers’
creditworthiness, relevant information and pricing models are outlined.
Basic financial decisions considering alternative financing opportunities
available to both large corporations and small start-ups are evaluated.
The second part of Course, focused on Insurance, first of all provides
students with an insight about the features of the “insurance device” as a
pure risk management technique and the functions carried out by
insurance companies within the financial system. Furthermore, it aims at
developing the knowledge of the economic and technical characteristics
of both life and non-life insurance contracts. Finally, the main indicators currently used to evaluate the economic performance of insurance companies are explained.

The teaching material is made up of sets of slides and other documents (articles, working papers, reports or other background material) that are available in the course official web page at the following link: https://www.dir.uniupo.it/course/view.php?id=12185 .
In order to login to the web page please contact the instructors (vincenzo.capizzi@uniupo.it or mario.valletta@uniupo.it).

1. Knowledge and understanding.
The Course aims at providing the knowledges needed to understand:
a) the nature, structure and funtions of the financial system;
b) the typologies of financial institutions, their main features and operations;
c) principles of bank management;
d) corporate fundraising policies;
e) the different methods of managing pure risks and the features of the “insurance device”;
f) the technical and economic characteristics of insurance products;
g) the equilibrium conditions in the management of insurance companies.

2. Applying knowledge and understanding. The ability to apply the acquired knowledge in order to analyse and evaluate:
a) the choice of the financial institution depending on the specificity of the financial needs;
b) the development and fairness of the pricing of financial contracts;
c) the features and the specific usefulness of different types of insurance products and the conditions of managerial equilibrium of insurance companies.

3. Making judgements. The critical ability ability of:
a) choosing the appropriate funding strategy for a given investment need;
b) choosing the product (or service) best suited to satisfy different insurance needs and to evaluate their risks.

4. Communication skills. The students will acquire the ability to use the technical language used by professionals in the fields at issue. The knowledge of the most important information sources will make them able to better support their arguments.

5. Learning abilities. The students will learn to know the most relevant sources of information, the main websites as well as the main accessible databases. They will develop the ability to analyse technical issues in the domain of banking and insurance and then identify the instruments which are best suited to manage them.

None.

1. Knowledge and understanding: traditional face-to-face lessons and self-study based on teaching materials.

2. Applying knowledge and understanding: exercises carried-out by the teacher during the course and exercises based on previous written exams carried-out by the students (homework based on materials published on the course’s webpage).

3. Making judgments: students will be stimulated to make a judgement on relevant cases, possibly also through assignments and presentations.

4. Communication skills: the meaning of the terms used by professionals in the field of insurance will be adequately explained.

5. Learning skills: every topic will be discussed beginning from the illustration of the problem and then analyzing the various possible solutions.

Further information can be found in the Course official web page at the following link: https://www.dir.uniupo.it/course/view.php?id=12185

One compulsory written exam consisting of six questions (closed books and closed notes), covering the whole course syllabus and including exercises, with a 60-minute duration. During the period of teaching, all students may sit for a mid-term written exam.

1. Knowledge and understanding: by written open questions.
2. Applying knowledge and understanding: through exercise.
3. Making judgements: by written open questions.
4. Communication skills: by written open questions.
5. Learning skills: by a mid-term exam during the course.

BANKING (15 hours of classroom-taught lessons)
1. Architecture of the financial system
− Overview of the financial system
− Pillars and functions of the financial system
− Typologies of financial institutions: depository vs. non depository institutions
− The role of commercial banks in the financial system
− Direct and Indirect Finance

2. Financial intermediaries: typologies, functions, operations
− Lending financial institutions
− Financial services intermediaries
− Mutual Funds and Asset Management Institutions
− Business angels and other equity investors
− Merchant & Investment Banks

3. Principles of bank management
− The banking activity: major business units
− Managing financial institutions
− The economics of commercial banks
− Analysing and decomposing bank ROE
− Identifying and managing banking risks

4. Principles of corporate lending
− Understanding financial contracts
− The role of collaterals, guarantees and covenants
− Designing innovative financial facilities
− The bank-firm lending relationship
− Designing and implementing sound fundraising policies
− Choosing the right financing facility: a life-cycle approach

5. Measuring and managing credit risk
− Structuring the loan concession process
− Measuring borrowers’ creditworthiness
− Sources of information for credit analysis
− Credit risk management: an overview
− Probability of default and other expected values
− Agencies’ ratings models and performance

INSURANCE (15 hours of classroom-taught lessons)
1. Risk and Insurance
− The insurance contract and the parties involved
− Types of insurable events: life insurance vs. non-life insurance
− The concept of risk and its relationship to uncertainty
− Classifications of risk
− Methods of handling risk

2. The insurance device
− Risk transfer and risk reduction through pooling
− Probability theory and the law of large numbers
− The ideal features of insurable risks
− The components of the gross premium
− Co-insurance and reinsurance

3. Life insurance
− Types of life insurance contracts
− The pricing of life insurance contracts
− Life technical provisions
− Examples of life policies

4. Non-life insurance
− Types of non-life insurance contracts
− The pricing of non-life insurance contracts
− Non-life technical provisions
− Examples of non-life policies

5. Insurance companies
− The functions carried out
− The typical structure of the income statement and the balance sheet
− The main economic performance indicators
− Outline of the regulatory framework

By giving a written exam, students must show:
KNOWLEDGE:
- To be aware of the major pillars of the financial system (regulation,
financial instruments, intermediaries and markets), their functions and
operations;
- to know the fundamental features of the insurance “mechanism” and the characteristics of the main types of insurance contracts;
- to know the logic underlying the definition of premiums and the quantification of technical reserves;
- to know the features of insurance undertakings’ economic equilibrium model.

COMPETENCES:
- to be able to select and evaluate on a comparative basis the financial
tools best suited to meet a given financial need;
- to be able to identify the financial institution or segment of capital markets to get access to achieve a given financial goal;
- to be able to interpret the technical and economic features of insurance contracts from the policyholder’s point of view;
- to be able to analyze and evaluate the main economic margins of insurance companies (life and non-life).

TRANSVERSAL SKILLS: - to be able to interconnect among each other’s topics faced in different chapters of the course;
- to be able to present a set of clear and structured arguments dealing with the management of both banks and insurance companies;
- to be acquainted with the technical terminology used in both the banking and the insurance industry at both the domestic and the international level;
- to be able to read, comprehend and comment technical material from books, financial journals or other sources.