Risk Management and Public Policy
Faculty
M. Saito
M. Takaoka
N. Adachi
Y. Kanemoto
R. Hayashi
Description
The risks involved in corporate activities such as catastrophic disasters, environmental liability, and shareholder lawsuit become more and more complicated and may incur large losses on corporate cash flows. Consequently, unless such enterprise risks are handled properly, a company may experience a sharp decline in corporate value, and in a pessimistic case, the society to which a company belongs would face human and economic losses.
This course develops discussions concerning how to reduce the degree of enterprise risks to a proper level (risk control), and prepare to cover potential losses incurred in realized risks (risk finance). The course topics include, as academic ones, risk-averse behavior and assessments of risk premiums, and, as practical ones, new financial techniques (alternative risk transfer, or ART) such as weather derivatives and CAT bonds. In addition, this course addresses which kind of policy frameworks would improve incentives for private companies to control and finance such enterprise risks. The course is instructed by not only internal instructors, but also outside researchers and professionals in the field of risk management, including those from Sompo Japan Insurance, and Sompo Japan Risk Management.