Strict liability is widely seen as the most suitable way to govern highly risky activities, such as environmentally dangerous production or genetic engineering. The reason which is usually given for applying strict liability to these areas, is that not only efficient care is supposed to be...

Ein wichtiges Problem bei der Versicherung und besonders der Rückversicherung vonKatastrophenereignissen besteht in der Gefahr einer Kumulierung von Schäden beim einzelnen(Rück)Versicherer und dem damit verbundenen Ausfallrisiko. Als ein wirksames Instrument zurBereitstellung von...

Catastrophe bonds (cat bonds) often use index triggers, such as, for instance, parametric descriptions of a catastrophe. This implies the problem of the so-called basis risk, resulting from the fact that, in contrast to traditional reinsurance, this kind of coverage cannotbe a perfect hedge for...

Recent events involving major insurance companies and insurance brokerage firms highlight substantial incentive problems in commercial and reinsurance markets where intermediation takes place. We show that in markets with informed as well as uninformed consumers and heterogeneous risk profiles...

In 2003, Swiss Re introduced a mortality-based security designed to hedge excessive mortality changes for its life book of business. The concern was apparently brevity risk, i.e., the risk of premature death. The brevity risk due to a pandemic is similar to the property risk associated with...

Many insurers disclose Embedded Value reports, a 'capital market-consistent' valuation framework for their life insurance business, to provide investors with additional information. We examine the incremental and relative information content of Embedded Value components in comparison to the...

This article addresses the role of independent insurance intermediaries in markets where matching is important. We compare fee-based and commission-based compensation systems and show that they are payoff equivalent if the intermediary is completely honest. Allowing for strategic behavior, we...

In the aftermath of the financial crisis and an increasingly global economy, insurance regulation is facing increased criticism and scrutiny. The Florida State University (FSU) Center for Insurance Research recently hosted a panel presentation on the theme “Reforming Insurance Regulation:...

This paper locks at markets charaterized by the fact that the demand side is insured. In these markets a consumer purchases a good to compensate consequences of unfavorable events, such as an accident or an illness. Insurance policies in most lines of insurance base indemnity on the insured's...