Lesson Note on Marine Insurance: Policies, Losses and Re-Insurance for SS 2

Class: Senior Secondary School 2 (SS2 / SSS2)
Term: First Term
Week: 11
Age: 16 years
Duration: 45 minutes
Subject: Commerce
Curriculum Theme: Risk Management and Insurance
Previous Lesson: Insurance: Meaning, Non-Life and Marine Insurance Types.
Topic: INSURANCE CONTD
Subject Matter: Marine insurance policies (time, voyage, valued, unvalued policy), marine losses (total loss, actual total loss, constructive total loss, partial loss, general average losses, particular average losses), underwriting, re-insurance, co-operative insurance of Nigeria

Specific Objectives

By the end of the lesson, pupils should be able to:

Cognitive Domain:

• Define marine insurance and list different types of marine policies.
• Identify and explain various types of marine losses.
• Define underwriting and re-insurance in the context of insurance.
• Explain the concept of co-operative insurance in Nigeria.

Affective Domain:

• Appreciate the importance of marine insurance in international trade.
• Understand the financial protection offered by different insurance concepts.

Psychomotor Domain:

• Classify different marine insurance policies based on given scenarios.
• Distinguish between various types of marine losses with practical examples.

Social Domain:

• Discuss the benefits and challenges of co-operative insurance in communities.

Reference Materials

The following resources were used in planning this lesson:

• Senior Secondary Schools Education Curriculum
• State Unified Scheme of Work
• Oyebola, A. (2018). Essential Commerce for Senior Secondary Schools. University Press Plc.

Instructional Materials

The teacher will teach this lesson with the aid of:

• Charts illustrating different marine policies and losses.
• Pictures of ships and marine accidents.
• Posters defining key insurance terms.

Rationale for the Lesson

This lesson helps pupils understand various aspects of marine insurance, which is important for protecting goods and vessels in transit. It also introduces them to key operational concepts like underwriting and re-insurance, and the community-focused approach of co-operative insurance, expanding their knowledge of the insurance industry.

Prerequisite/Previous Knowledge

Pupils should have a basic understanding of general insurance principles, types, and importance from the previous lesson.

Lesson Content/Board Summary

Insurance (Continued)

Marine Insurance Policies

Marine insurance covers loss or damage of ships, cargo, terminals, and any transport by which property is transferred, acquired, or held between the points of origin and final destination.

The following are types of marine insurance policies:

• Time Policy: This policy covers the ship or cargo for a specific period, usually not exceeding 12 months, regardless of the number of voyages made.
• Voyage Policy: This policy covers the ship or cargo for a specific voyage from one port to another, irrespective of the time taken.
• Valued Policy: In this policy, the value of the subject matter insured (e.g., ship or cargo) is agreed upon and stated in the policy document at the time of contract.
• Unvalued Policy: Here, the value of the subject matter insured is not stated in the policy document but is left to be ascertained in case of a loss.

Marine Losses

Marine losses refer to the destruction, damage, or disappearance of insured property (ship or cargo) covered by a marine insurance policy.

The following are types of marine losses:

• Total Loss: This occurs when the insured property is completely destroyed or lost, either actually or constructively.
• Actual Total Loss: The subject matter insured is completely destroyed, irretrievably lost, or so damaged as to cease to be a thing of the kind insured (e.g., a ship sinks to the bottom of the ocean).
• Constructive Total Loss: This occurs when the cost of recovery, repair, and future salvage of the insured property would exceed its value when repaired. The owner can abandon the property to the insurer and claim total loss.
• Partial Loss: Any loss that is not a total loss. The insured property is damaged but not completely destroyed.
• General Average Losses: These are losses caused by sacrifices made or expenses incurred voluntarily and reasonably in times of common danger, for the preservation of the property involved in a common maritime adventure. These losses are shared proportionally by all parties interested in the voyage (ship, cargo, freight).
• Particular Average Losses: These are partial losses of the subject matter insured, caused by an accident, and which are not general average losses. They are borne solely by the owner of the property lost or damaged.

Underwriting

Underwriting is the process by which an insurance company assesses the risk of insuring a particular person or property, determines the terms and conditions of the policy, and calculates the appropriate premium to charge.

Re-insurance

Re-insurance is the practice where one insurance company (the ceding company) transfers part of its risk to another insurance company (the re-insurer). This helps the ceding company to reduce its exposure to large losses and allows it to underwrite more policies.

Co-operative Insurance of Nigeria

Co-operative insurance involves a group of individuals or organizations pooling their resources to provide insurance coverage for themselves. Members typically share in the profits and losses, and the primary aim is to provide affordable and accessible insurance to its members rather than maximizing profit.

Teaching Methods/Instructional Techniques

Discussion, Lecture, Demonstration, Question and Answer, Visual Aids

Instructional Procedures

Step 1: Introduction

Time: 5 minutes
Teaching Skill: Set Induction
Teacher’s Activity: The teacher welcomes the pupils and asks questions about the previous lesson on general insurance, types, and principles to refresh their memory.
Pupils’ Activity: Pupils respond to the questions, recalling key points from the previous lesson.
Learning Point: Pupils connect new knowledge with prior understanding of insurance.

Step 2: Marine Insurance Policies

Time: 10 minutes
Teaching Skill: Explanation/Discussion
Teacher’s Activity: The teacher introduces marine insurance and explains the various types of marine policies: time, voyage, valued, and unvalued policies, using charts and examples.
Pupils’ Activity: Pupils listen attentively, ask questions for clarification, and take notes on the definitions and differences.
Learning Point: Pupils understand the concept of marine insurance and its policy types.

Step 3: Marine Losses

Time: 10 minutes
Teaching Skill: Explanation/Illustration
Teacher’s Activity: The teacher explains the different categories of marine losses: total loss (actual and constructive), partial loss, general average losses, and particular average losses, providing simple shipping examples for each.
Pupils’ Activity: Pupils identify the types of marine losses from the examples given and note down their definitions.
Learning Point: Pupils can distinguish between different types of marine losses.

Step 4: Underwriting and Re-insurance

Time: 5 minutes
Teaching Skill: Explanation/Definition
Teacher’s Activity: The teacher introduces the concepts of underwriting and re-insurance, explaining their roles in the insurance business with simple analogies.
Pupils’ Activity: Pupils listen, define underwriting and re-insurance, and ask questions about their functions.
Learning Point: Pupils understand the definitions and importance of underwriting and re-insurance.

Step 5: Co-operative Insurance of Nigeria

Time: 5 minutes
Teaching Skill: Explanation/Discussion
Teacher’s Activity: The teacher explains the concept of co-operative insurance, highlighting its purpose and how it operates in Nigeria.
Pupils’ Activity: Pupils listen, define co-operative insurance, and discuss its potential benefits to communities.
Learning Point: Pupils grasp the idea of co-operative insurance.

Step 6: Evaluation/Review

Time: 5 minutes
Teaching Skill: Questioning/Assessment
Teacher’s Activity: The teacher evaluates the learning by asking the following questions:

1. Define marine insurance.
2. Distinguish between a time policy and a voyage policy.
3. List any three types of marine losses.
4. Explain the terms “underwriting” and “re-insurance”.

Pupils’ Activity: Pupils answer orally and in writing.
Learning Point: Pupils demonstrate understanding of the lesson.

Step 7: Conclusion

Time: 5 minutes
Teaching Skill: Summarization
Teacher’s Activity: The teacher summarizes the key points of the lesson, emphasizing the importance of marine insurance in trade and the roles of underwriting, re-insurance, and co-operative insurance. The teacher then assigns homework.
Pupils’ Activity: Pupils listen to the summary and copy the assigned homework.
Learning Point: Pupils consolidate their learning and prepare for further study.

Lesson Keywords

• Marine Insurance – Insurance covering loss or damage of ships, cargo, and transport.
• Time Policy – Covers insurance for a specific period.
• Voyage Policy – Covers insurance for a specific journey.
• Valued Policy – Policy where the insured value is agreed and stated.
• Unvalued Policy – Policy where the insured value is determined after a loss.
• Actual Total Loss – Complete destruction or irretrievable loss of insured property.
• Constructive Total Loss – When cost of recovery exceeds insured value.
• General Average Losses – Sacrifices made to save a common maritime adventure, shared proportionally.
• Underwriting – Process of assessing risk and setting premiums by an insurer.
• Re-insurance – An insurer transferring part of its risk to another insurer.
• Co-operative Insurance – Group of individuals pooling resources for mutual insurance coverage.

Differentiation

For pupils who grasp concepts quickly, the teacher can ask them to research real-life examples of marine losses or discuss the economic impact of re-insurance. For those who need more support, the teacher can provide simplified definitions and additional visual aids, or pair them with peers for collaborative learning and discussion.

Note for teachers using this lesson plan

Ensure to use clear and relatable examples when explaining marine losses and policies. Encourage pupils to ask questions and participate actively in discussions. Visual aids like charts and pictures of ships or ports will greatly enhance understanding. Emphasize the practical application of these insurance concepts in real-world business and trade.