SDST3906 Risk theory I (6 credits) Academic Year 2025
Offering Department SCDS (Department of Statistics and Actuarial Science) Quota ---
Course Co-ordinator Prof K C Cheung, SCDS (Department of Statistics and Actuarial Science) < kccg@hku.hk >
Teachers Involved (Prof K C Cheung,Statistics & Actuarial Science)
Course Objectives Risk theory is one of the main topics in actuarial science.  Risk theory is the applications of statistical models and stochastic processes to insurance problems such as the premium calculation.
Course Contents & Topics Severity models; frequency models; collective risk models; coverage modifications; risk measures.
Course Learning Outcomes
On successful completion of this course, students should be able to:

CLO 1 understand the individual risk model and the collective risk model, evaluate the distribution and expectation of the total claim amounts
CLO 2 estimate the premium of a policyholder and the total claim amounts using the information of the claim amounts made in previous years
CLO 3 calculate some commonly used risk measures and explain their use and limitation
Pre-requisites
(and Co-requisites and
Impermissible combinations)		 Pass in SDST3903, or already enrolled in this course; or
Pass in MATH3603 or SDST3603
Only for students admitted in 2025 and thereafter.
Course Status with Related Major/Minor /Professional Core 2U000C00 Course not offered under any Major/Minor/Professional core
2024 BSc in Actuarial Science ( Core/Compulsory )
2024 Minor in Actuarial Studies ( Disciplinary Elective )
2023 BSc in Actuarial Science ( Core/Compulsory )
2023 Minor in Actuarial Studies ( Disciplinary Elective )
2022 BSc in Actuarial Science ( Core/Compulsory )
2022 Minor in Actuarial Studies ( Disciplinary Elective )
2021 BSc in Actuarial Science ( Core/Compulsory )
2021 Minor in Actuarial Studies ( Disciplinary Elective )
Course to PLO Mapping 2024 BSc in Actuarial Science < PLO 1,2,3,4,5 >
2023 BSc in Actuarial Science < PLO 1,2,3,4,5 >
2022 BSc in Actuarial Science < PLO 1,2,3,4,5 >
2021 BSc in Actuarial Science < PLO 1,2,3,4,5 >
Offer in 2025 - 2026 Y        1st sem    Examination Dec     
Offer in 2026 - 2027 Y
Course Grade A+ to F
Grade Descriptors
A Demonstrate thorough mastery at an advanced level of extensive knowledge and skills required for attaining all the course learning outcomes. Show strong analytical and critical abilities and logical thinking, with evidence of original thought, and ability to apply knowledge to a wide range of complex, familiar and unfamiliar situations. Apply highly effective organizational and presentational skills.
B Demonstrate substantial command of a broad range of knowledge and skills required for attaining at least most of the course learning outcomes. Show evidence of analytical and critical abilities and logical thinking, and ability to apply knowledge to familiar and some unfamiliar situations. Apply effective organizational and presentational skills.
C Demonstrate general but incomplete command of knowledge and skills required for attaining most of the course learning outcomes. Show evidence of some analytical and critical abilities and logical thinking, and ability to apply knowledge to most familiar situations. Apply moderately effective organizational and presentational skills.
D Demonstrate partial but limited command of knowledge and skills required for attaining some of the course learning outcomes. Show evidence of some coherent and logical thinking, but with limited analytical and critical abilities. Show limited ability to apply knowledge to solve problems. Apply limited or barely effective organizational and presentational skills.
Fail Demonstrate little or no evidence of command of knowledge and skills required for attaining the course learning outcomes. Lack of analytical and critical abilities, logical and coherent thinking. Show very little or no ability to apply knowledge to solve problems. Organization and presentational skills are minimally effective or ineffective.
Communication-intensive Course N
Course Type Lecture-based course
Course Teaching
& Learning Activities
Activities Details No. of Hours
Lectures 36.0
Tutorials 12.0
Reading / Self study 100.0
Assessment Methods
and Weighting
Methods Details Weighting in final
course grade (%)		 Assessment Methods
to CLO Mapping
Assignments Coursework (assignments, tutorials, and a class test) 25.0 1,2,3
Examination One 3-hour written examination 75.0 1,2,3
Required/recommended reading
and online materials		 Klugman S. A., Panjer H. H., & Willmot G. E.: Loss Models: From Data to Decisions (John Wiley & Sons, Inc., 2019, 5th edition)
Course Website http://moodle.hku.hk
Additional Course Information NIL