✦ LIBER ✦
223044 (E31) Risk based capital allocation and risk adjusted performance management in property/liability-insurance : Albrecht P., Astin/Afir Colloquia, Cairns, Australia, 1997, pp 57–80
- Publisher
- Elsevier Science
- Year
- 1998
- Tongue
- English
- Weight
- 90 KB
- Volume
- 22
- Category
- Article
- ISSN
- 0167-6687
No coin nor oath required. For personal study only.
✦ Synopsis
differ from most other markets because in insurance markets competition can destroy the market rather than make it work better. One of the dimensions along which insurance companies compete is underwriting -trying to ensure that the risks covered are "good" risks or that ifa high risk is insured, the premium charged is at least commenstirate with the potential cost. The resulting partitioning of risk limits the amount of insurance that potential insurance customers can buy. In the extreme case, such competitive behaviour will destroy the insurance market altogether. A simple model illustrates.