Developments in Risk and Insurance Economics: the Past 25 Years.

The paper reviews the evolution in insurance economics over the past 25 years, by first recalling the situation in 1973, then presenting the developments and new approaches which flourished since then. The paper argues that these developments were only possible because steady advances were made in the economics of risk and uncertainty and in financial theory.INSURANCE ; RISK ; HISTORY

An Economists View on Risk Perceptions for Severe Accidents.

risk ; accidents

L'attitude face au risque de perte.

risque

Optimal Catastrophe Insurance with Uncorrelated Catastrophes.

This paper adopts a normative approach to catastrophe insurance. It addresses the question of how innovations in the design of insurance contracts could help resolve the capacity gap in the provision of insurance against natural catastrophes. It extends previous research with the same approach first by considering the case of "uncorrelated catastrophes", and second by combining the influence of catastrophes on claims amounts (severity risk) and on the probability of loss (frequency risk). We show that the menu of contracts proposed in previous research, where only one type of catastrophe is considered, is dominated by the menu of contracts proposed in this paper, taking into account the absence of correlation between catastrophes of different kinds.INSURANCE ; OPTIMIZATION ; RISK

Risk Taking in the Domain of Losses: Experiments in Several Countries.

This paper presents an experimental investigation of risk taking in the domain of losses. The experiments are conducted with students in several universities during introduction rudiments to expected utility theory and risk behaviour. The results are partly compatible with expected utility theory, assuming an inflection point in the utility function overlosses. They also show similarities in the risk perception of students across different countries, i.e., a useful validation of human behaviour in an international context.RISK ; ECONOMICS ; EXPERIMENTS

Using Catastrophe-Linked Securities to Diversify Insurance Risk: a Financial Analysis of Cat Bonds.

Severe natural catastrophes in the early nineties have brought about a lack of financial capacity in the catastrophe line of the global reinsurance market. The finance industry reacted to this situation by issuing innovative products designed to spread the excess risk more widely among international investors (risk securitization). The paper reviews these developments and stresses their significance with respect to the economic theory of risk exchanges. Special attention is devoted to the case of catastrophe-linked bonds, issued at a premium by ceding insurers to secure ex post conditional capital for the payment of claims.INVESTMENTS ; INSURANCE ; RISK

Market Efficiency and Index OPtion Pricing : An Empirical Study Based on the Swiss Financial Market.

pricing ; financial market