Our innovative application of these pedagogical issues can most easily by first providing the reviewer with a brief description of the Challenge. Please note that a more detailed description of the intricacies of the game, its structure, its process, etc., is available in the lengthy full description (PDF) available for download.
We run the Challenge as a weeklong summer camp for 20 high school seniors who have a possible interest in attaining degrees in a risk management related field, e.g. business, actuarial science, insurance, etc. We have run the program for two years, thus far. The Challenge is a team-based competition that creates many parallels with the business world. Teams of two and three students create "corporations" and assume roles as senior risk managers. They are allocated a specific amount of "capital" and asked to maximize "owner equity" over the next four "quarters" (a quarter is a 24 period in the context of the game). Their corporations can earn "revenue" by successfully completing tasks and winning various insurance and risk management competitions over the course of the week as well as by earning interest on selected investment vehicles. Their corporations may lose value by being negatively affected by "random" hazard events. At the outset of each quarter each corporation has a number of financial decisions to make relating to the purchase of risk assessments of the hazard environment for the coming quarter, the purchase of "appropriate" risk management solutions, e.g. loss prevention, loss reduction and/or insurance. Depending on the nature of the hazard risk environment, some combination of solutions proves to be probabilistically better than others. That is to say, buying more protection isn't always the most economical decision.
This competitive framework requires repeated interaction with the risk management process – which aids in reinforcing learning. Early in the game students rely primarily on their intuitive abilities to limit risk, however, with each successive iteration of the game, more formal information is revealed regarding the risk management process, statistical analysis, strategic management etc. Thus, are around the mid-point of the competition all teams have had access to the necessary information and techniques for assessing the hazard environment and creating a logical solution to the problem.
Aiding in the dynamic implementation of the Challenge are a number of creative ideas and technological applications. First, the Challenge creates a marketplace feel where corporations seek to out-play one another. We establish a Challenge website that is updated on a daily basis that includes photos of events from the previous day, short news articles related to the results of the previous day as well as the current team standings.
Additionally, at the end of each quarter each team receives its financial statements and a summary sheet advising them of their corporation's results. Aside from reinforcing the parallels with the corporate world, these financial statements are created using the merge function in MSOffice and thus, we are able to generate such statements for any number of teams within a very short period of time – our turn around time for generating these financial statements is less than an hour.
The team with the most owner equity at the end of four quarters is the winner of the competition.
