Personal Lines Risk Management and Insurance Simulation Game

24 Pages Posted: 27 Mar 2013

See all articles by Dana A. Kerr

Dana A. Kerr

University of Southern Maine; St. Mary's University of San Antonio

Stephen M. Avila

Ball State University - Department of Finance and Insurance

Date Written: Spring 2013

Abstract

This article examines the use of a Personal Lines Risk Management and Insurance Simulation Game in an introductory risk management and insurance (RMI) course. Business simulations and other case study teaching methods are a way to increase student engagement in the classroom, which can translate into a greater likelihood of higher learning outcomes. Because no one knows for sure what will happen in the future, there is a fundamental trade‐off that influences all RMI decisions: incur a known cost today in order to reduce risk in the future even though a loss may never materialize or refuse the immediate cost that would have reduced risk even though a future loss event might still occur. It is difficult to convince students of the consequences of such decisions because most realize that the individual likelihood of suffering an insurable loss is quite small. Students also fail to understand the complexity of making these trade‐off decisions multiple times in a given period for each different loss exposure they face. A description of the purpose of the game, innovative features, Smith Family Case Study, game specifics, and objectives and grading for the game have been provided. This article can be used as a step‐by‐step guide to implement this simulation in RMI courses at other universities to increase student engagement and enhance student learning.

Suggested Citation

Kerr, Dana A. and Avila, Stephen M., Personal Lines Risk Management and Insurance Simulation Game (Spring 2013). Risk Management and Insurance Review, Vol. 16, Issue 1, pp. 123-146, 2013, Available at SSRN: https://ssrn.com/abstract=2240105 or http://dx.doi.org/10.1111/rmir.12008

Dana A. Kerr (Contact Author)

University of Southern Maine ( email )

P.O. Box 9300
Portland, ME 04104-9300
United States

St. Mary's University of San Antonio ( email )

One Camino Santa Maria
San Antonio, TX 78228
United States

Stephen M. Avila

Ball State University - Department of Finance and Insurance ( email )

Muncie, IN 47306-0340
United States

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