Faculty of Business and Economics

Monash University

Undergraduate - Unit

This unit entry is for students who completed this unit in 2015 only. For students planning to study the unit, please refer to the unit indexes in the the current edition of the Handbook. If you have any queries contact the managing faculty for your course or area of study.

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6 points, SCA Band 3, 0.125 EFTSL

Refer to the specific census and withdrawal dates for the semester(s) in which this unit is offered.

FacultyFaculty of Business and Economics
Organisational UnitDepartment of Econometrics and Business Statistics
OfferedClayton Second semester 2015 (Day)
Coordinator(s)Dr Mike Callan


To provide a further grounding in mathematical and statistical techniques of particular relevance to insurance and financial work.


The learning goals associated with this unit are to:

  1. explain the concepts of decision theory and apply them
  2. calculate probabilities and moments of loss distributions both with and without limits and risk-sharing arrangements
  3. construct risk models involving frequency and severity distributions and calculate the moment generating function and the moments for the risk models both with and without simple reinsurance arrangements
  4. explain the concept of ruin for a risk model
  5. explain the fundamental concepts of Bayesian statistics and use these concepts to calculate Bayesian estimators
  6. describe the fundamental concepts of risk rating and apply them to simple experience rating systems
  7. describe and apply techniques for analysing a delay (or run-off) triangle and projecting the ultimate position
  8. explain the fundamental concepts of a generalised linear model (GLM), and describe how a GLM may apply
  9. define and apply the main concepts underlying the analysis of time series models
  10. explain the concepts of 'Monte Carlo' simulation using a series of pseudo-random numbers.


Within semester assessment: 30%
Examination: 70%

Workload requirements

Minimum total expected workload to achieve the learning outcomes for this unit is 144 hours per semester typically comprising a mixture of scheduled learning activities and independent study. Independent study may include associated readings, assessment and preparation for scheduled activities. The unit requires on average three/four hours of scheduled activities per week. Scheduled activities may include a combination of teacher directed learning, peer directed learning and online engagement.

See also Unit timetable information

Chief examiner(s)