Insurance is an extraordinarily useful tool to manage risk. When it works as intended, it provides financial protection to individuals and a profitable business model for insurance firms and their investors. But it is broadly misunderstood by consumers, regulators, and insurance executives. This book looks at the behavior of individuals at risk, insurance industry decision makers, and policy makers at the local, state, and federal level involved in the selling, buying, and regulating of insurance. It compares their actions to those predicted by benchmark models of choice derived from classical economic theory. When actual choices stray from predictions, the behavior is considered to be anomalous. With considerable sums of money at stake, both in consumer premiums and insurance company payouts, it is important to understand the reasons for anomalous behavior. Howard Kunreuther, Mark Pauly, and Stacey McMorrow examine these anomalies through the lens of behavioral economics, which takes into account emotions, biases, and simplified decision rules. The authors then consider if and how such behavioral anomalies could be modified to improve individual and social welfare. This book is neither a defense of the insurance industry nor an attack on it. Neither is it a consumer guide to purchasing insurance, although the authors believe that consumers will benefit from the insights it contains. Rather, this book describes situations in which both public policy and the insurance industry s collective posture need to change. This may require incentives, rules, and institutions to help reduce both inefficient and anomalous behavior, thereby encouraging behavior that will improve individual and social welfare."

This book, the second one of three volumes, gives practical examples by a number of use cases showing how to take first steps in the digital journey of banks and insurance companies. The angle shifts over the volumes from a business-driven approach in "Disruption and DNA" to a strong technical focus in "Data Storage, Processing and Analysis", leaving "Digitalization and Machine Learning Applications" with the business and technical aspects in-between. This second volume mainly emphasizes use cases as well as the methods and technologies applied to drive digital transformation (such as processes, leveraging computational power and machine learning models).

This open access book discusses the statistical modeling of insurance problems, a process which comprises data collection, data analysis and statistical model building to forecast insured events that may happen in the future. It presents the mathematical foundations behind these fundamental statistical concepts and how they can be applied in daily actuarial practice. Statistical modeling has a wide range of applications, and, depending on the application, the theoretical aspects may be weighted differently: here the main focus is on prediction rather than explanation. Starting with a presentation of state-of-the-art actuarial models, such as generalized linear models, the book then dives into modern machine learning tools such as neural networks and text recognition to improve predictive modeling with complex features. Providing practitioners with detailed guidance on how to apply machine learning methods to real-world data sets, and how to interpret the results without losing sight of the mathematical assumptions on which these methods are based, the book can serve as a modern basis for an actuarial education syllabus.

This book encourages insurance companies and regulators to explore offering Islamic insurance to boost the insurance industry in India. The distinctive features of Takaful also make it appealing even to non-Muslims. According to the 2012 World Takaful Report, India has immense potential for Takaful is based on the size of its Muslim population and the growth of its economy. However, it is surprising that Takaful has yet to be introduced in India since it has been offered in non-majority Muslim countries, such as Singapore, Thailand, and Sri Lanka. When the concept and practice of Takaful are examined, it is free from interest, uncertainty, and gambling. These are the main elements prohibited in Islam. However, it has been evidenced that these elements are also banned in teaching other religions believed by the Indians. Given this landscape, this book fills the gap in research on the viability of Takaful in India, focusing on its empirical aspects by examining the perception of Indian insurance operators toward Takaful.

Insurance Economics brings together the economic analysis of decision making under risk, risk management and demand for insurance among individuals and corporations, objectives pursued and management tools used by insurance companies, the regulation of insurance, and the division of labor between private and social insurance. Appropriate both for advanced undergraduate and graduate students of economics, management, and finance, this text provides the background required to understand current research. Predictions derived from theoretical arguments are not merely stated, but also related to empirical evidence. Throughout the book, conclusions summarize key results, helping readers to check their knowledge and comprehension. Issues discussed include paradoxes in decision making under risk and attempts at their resolution, moral hazard and adverse selection including the possibility of a "death spiral", and future challenges to both private and social insurance such as globalization and the availability of genetic information. This second edition has been extensively revised. Most importantly, substantial content has been added to represent the evolution of risk-related research. A new chapter, Insurance Demand II: Nontraditional Approaches, provides a timely addition in view of recent developments in risk theory and insurance. Previous discussions of Enterprise Risk Management, long-term care insurance, adverse selection, and moral hazard have all been updated. In an effort to expand the global reach of the text, evidence and research from the U.S. and China have also been added.

Der Band stellt einerseits Vorgeschichte, Verlauf und Auswirkungen eines der spektakularsten Zusammenbruche eines Versicherungskonzerns im 20. Jahrhundert dar und bietet daruber hinaus eine am Beispiel demonstrierte, systematische Analyse der Verflechtung von Misswirtschaft mit Medien, Staat und Gesellschaft. Die Phoenix Lebensversicherung, mit Sitz in Wien und Kunden in 22 Landern, wurde im Jahr 1936 zahlungsunfahig. Sie hatte riesige Verluste aufgeturmt, Bilanzen gefalscht und Schlusselpersonen hofiert. Ihr Sturz drohte eine europaweite Finanzkrise auszuloesen und wurde mit diktatorischen Massnahmen aufgefangen. Das Buch schildert die wirtschaftliche wie politische Rolle des Versicherers vor 1918, wahrend der Weimarer Republik und ab 1933.

This book is devoted to the mathematical methods of metamodeling that can be used to speed up the valuation of large portfolios of variable annuities. It is suitable for advanced undergraduate students, graduate students, and practitioners. It is the goal of this book to describe the computational problems and present the metamodeling approaches in a way that can be accessible to advanced undergraduate students and practitioners. To that end, the book will not only describe the theory of these mathematical approaches, but also present the implementations.

This 2006 book introduces and develops the basic actuarial models and underlying pricing of life-contingent pension annuities and life insurance from a unique financial perspective. The ideas and techniques are then applied to the real-world problem of generating sustainable retirement income towards the end of the human life-cycle. The role of lifetime income, longevity insurance, and systematic withdrawal plans are investigated in a parsimonious framework. The underlying technology and terminology of the book are based on continuous-time financial economics by merging analytic laws of mortality with the dynamics of equity markets and interest rates. Nonetheless, the book requires a minimal background in mathematics and emphasizes applications and examples more than proofs and theorems. It can serve as an ideal textbook for an applied course on wealth management and retirement planning in addition to being a reference for quantitatively-inclined financial planners.

This book presents a consistent and complete framework for studying the risk management of a pension fund. It gives the reader the opportunity to understand, replicate and widen the analysis. To this aim, the book provides all the tools for computing the optimal asset allocation in a dynamic framework where the financial horizon is stochastic (longevity risk) and the investor's wealth is not self-financed. This tutorial enables the reader to replicate all the results presented. The R codes are provided alongside the presentation of the theoretical framework. The book explains and discusses the problem of hedging longevity risk even in an incomplete market, though strong theoretical results about an incomplete framework are still lacking and the problem is still being discussed in most recent literature.

This book begins with the fundamental large sample theory, estimating ruin probability, and ends by dealing with the latest issues of estimating the Gerber-Shiu function. This book is the first to introduce the recent development of statistical methodologies in risk theory (ruin theory) as well as their mathematical validities. Asymptotic theory of parametric and nonparametric inference for the ruin-related quantities is discussed under the setting of not only classical compound Poisson risk processes (Cramer-Lundberg model) but also more general Levy insurance risk processes. The recent development of risk theory can deal with many kinds of ruin-related quantities: the probability of ruin as well as Gerber-Shiu's discounted penalty function, both of which are useful in insurance risk management and in financial credit risk analysis. In those areas, the common stochastic models are used in the context of the structural approach of companies' default. So far, the probabilistic point of view has been the main concern for academic researchers. However, this book emphasizes the statistical point of view because identifying the risk model is always necessary and is crucial in the final step of practical risk management.

A Hands-On Approach to Understanding and Using Actuarial Models Computational Actuarial Science with R provides an introduction to the computational aspects of actuarial science. Using simple R code, the book helps you understand the algorithms involved in actuarial computations. It also covers more advanced topics, such as parallel computing and C/C++ embedded codes. After an introduction to the R language, the book is divided into four parts. The first one addresses methodology and statistical modeling issues. The second part discusses the computational facets of life insurance, including life contingencies calculations and prospective life tables. Focusing on finance from an actuarial perspective, the next part presents techniques for modeling stock prices, nonlinear time series, yield curves, interest rates, and portfolio optimization. The last part explains how to use R to deal with computational issues of nonlife insurance. Taking a do-it-yourself approach to understanding algorithms, this book demystifies the computational aspects of actuarial science. It shows that even complex computations can usually be done without too much trouble. Datasets used in the text are available in an R package (CASdatasets).

The market is like the sea: it gives, and it takes away. That became apparent once again when the economy and society went into "lockdown" due to the coronavirus outbreak. Organizations will either sink or swim, and only the pros will be able to keep their heads above water. This is a self-help book for managers, supervisors and administrators who see themselves as skippers at the helm of an organization in times of turbulence, uncertainty and complexity. It provides a number of the latest handy management models, such as the Three-Phase Model, Governance Model and Management Matrix, which help leaders and managers arrive at well thought-out risk management decisions. In addition, the practical cases and discussion questions in each chapter help readers implement these models in their organizations. The book is an English translation of the Dutch book 'Varen in de mist', which was nominated for the Dutch Management Book of the Year.

This book examines the challenges for the life insurance sector in Europe arising from new technologies, socio-cultural and demographic trends, and the financial crisis. It presents theoretical and applied research in all areas related to life insurance products and markets, and explores future determinants of the insurance industry's development by highlighting novel solutions in insurance supervision and trends in consumer protection. Drawing on their academic and practical expertise, the contributors identify problems relating to risk analysis and evaluation, demographic challenges, consumer protection, product distribution, mortality risk modeling, applications of life insurance in contemporary pension systems, financial stability and solvency of life insurers. They also examine the impact of population aging on life insurance markets and the role of digitalization. Lastly, based on an analysis of early experiences with the implementation of the Solvency II system, the book provides policy recommendations for the development of life insurance in Europe.

This open access book collects expert contributions on actuarial modelling and related topics, from machine learning to legal aspects, and reflects on possible insurance designs during an epidemic/pandemic. Starting by considering the impulse given by COVID-19 to the insurance industry and to actuarial research, the text covers compartment models, mortality changes during a pandemic, risk-sharing in the presence of low probability events, group testing, compositional data analysis for detecting data inconsistencies, behaviouristic aspects in fighting a pandemic, and insurers' legal problems, amongst others. Concluding with an essay by a practicing actuary on the applicability of the methods proposed, this interdisciplinary book is aimed at actuaries as well as readers with a background in mathematics, economics, statistics, finance, epidemiology, or sociology.

Dieses Buch befasst sich in 24 Beitragen mit aktuellen Fragen des Medizin- und Haftungsrechts. Der Gesundheitssektor ist gepragt von mitunter gegenlaufigen Tendenzen eines schnellen wissenschaftlichen Fortschritts, einer strengen Bedarfsplanung und knapper finanzieller Mittel. Bei veranderter Behandlungskultur steigen die Erwartungen der Patienten und die Anforderungen der Rechtsprechung an AErzte und andere Leistungserbringer. Haufige Klageverfahren sind Ausdruck und steigende Schadensaufwendungen der Haftpflichtversicherer Folge dieser veranderten Gesundheitslandschaft. Die Beitrage dieses Buches widmen sich daher Grundfragen des Haftungsrechts ebenso wie neuen Fragestellungen infolge des Patientenrechtegesetzes. Perspektiven fur die Berufshaftpflichtversicherer kommen ebenso zur Sprache wie Aspekte der Planung arztlicher Tatigkeit. Zu Wort kommen spezialisiert tatige Mediziner, Juristen und OEkonomen ebenso wie namhafte Wissenschaftler.

This Volume of the AIDA Europe Research Series on Insurance Law and Regulation focuses on transparency as the guiding principle of modern insurance law. It consists of chapters written by leaders in the respective field, who address transparency in a range of civil and common law jurisdictions, along with overview chapters. Each chapter reviews the transparency principles applicable in the jurisdiction discussed. Whether expressly or impliedly, all jurisdictions recognize a duty on the part of the insured to make a fair presentation of the risk when submitting a proposal for cover to the insurers, although there is little consensus on the scope of that duty. Disputed matters in this regard include: whether it is satisfied by honest answers to express questions, or whether there is a spontaneous duty of disclosure; whether facts relating to the insured's character, as opposed to the nature of the risk itself, are to be presented to the insurers; the role of insurance intermediaries in the placement process; and the remedy for breach of duty. Transparency is, however, a much wider concept. Potential policyholders are in principle entitled to be made aware of the key terms of coverage and to be warned of hidden traps (such as conditions precedent, average clauses and excess provisions), but there are a range of different approaches. Some jurisdictions have adopted a "soft law" approach, using codes of practice for pre-contract disclosure, while other jurisdictions employ the rather nebulous duty of (utmost) good faith. Leaving aside placement, transparency is also demanded after the policy has been incepted. The insured is required to be transparent during the claims process. There is less consistency in national legislation regarding the implementation of transparency by insurers in the context of handling claims.

This book focuses on the management of ship operations, an activity that requires integrative knowledge and technical expertise that spans various disciplines. As such, ship operations personnel are expected to be well-versed with aspects of management, economics, engineering, technology and law. Further, ship operations management requires the ability to identify and neutralize threats and to manage risks and make decisions that will optimize costs and contribute to performance improvements. Despite the fundamental nature of ship operations management, no book has ever attempted to reconcile and compile a comprehensive body of knowledge, while pursuing a coherent, structured and systematic approach. This edited volume addresses that fundamental gap in the extant literature, and brings together a wealth of knowledge from experts in their respective fields. Concretely, it explores issues of organization, technical management, crewing and behavioral issues, chartering and post fixture, risk management, finance, legal aspects of international conventions and regulations, attainment of safety, security and marine insurance, as well as ocean governance and sustainability. As such, the book offers a vital reference guide for maritime companies and organizations, while also serving as a teaching supplement in academic and professional maritime programmes.

This volume features a selection of contributions presented at the 2019 Wroclaw Conference in Finance, covering a wide range of topics in finance and financial economics, e.g. financial markets; monetary policy; corporate, personal and public finance; and risk management and insurance. Reflecting the diversity and richness of research in the field, the papers discuss both fundamental and applied finance, and offer a detailed analysis of current financial-market problems, including specifics of the Polish and Central European markets. They also examine the results of advanced financial modeling. Accordingly, the proceedings offer a valuable resource for researchers at universities and policy institutions, as well as graduate students and practitioners in economics and finance at both private and government organizations.

This textbook provides a broad overview of the present state of insurance mathematics and some related topics in risk management, financial mathematics and probability. Both non-life and life aspects are covered. The emphasis is on probability and modeling rather than statistics and practical implementation. Aimed at the graduate level, pointing in part to current research topics, it can potentially replace other textbooks on basic non-life insurance mathematics and advanced risk management methods in non-life insurance. Based on chapters selected according to the particular topics in mind, the book may serve as a source for introductory courses to insurance mathematics for non-specialists, advanced courses for actuarial students, or courses on probabilistic aspects of risk. It will also be useful for practitioners and students/researchers in related areas such as finance and statistics who wish to get an overview of the general area of mathematical modeling and analysis in insurance.

This is a new edition of a very successful introduction to statistical methods for general insurance practitioners. No prior statistical knowledge is assumed, and the mathematical level required is approximately equivalent to school mathematics. While the book is primarily introductory, the authors discuss some more advanced topics, including simulation, calculation of risk premiums, credibility theory, estimation of outstanding claim provisions and risk theory. All topics are illustrated by examples drawn from general insurance, and references for further reading are given. Solutions to most of the exercises are included. For the new edition, the opportunity has been taken to make minor improvements and corrections throughout the text, to rewrite some sections to improve clarity, and to update the examples and references. A new section dealing with estimation has also been added.

This book examines interesting new topics in applied economics from the perspectives of the economics of information and risk, two fields of economics that address the consequences of asymmetric information, environmental risk and uncertainty for the nature and efficiency of interactions between individuals and organizations. In the economics of information, the essential task is to examine the condition of asymmetric information under which the information gap is exploited. For the economics of risk, it is important to investigate types of behavior including risk aversion, risk sharing, and risk prevention, and to reexamine the classical expected utility approach and the relationships among several types of the changes in risk. Few books have ever analyzed topics in applied economics with regard to information and risk. This book provides a comprehensive collection of applied analyses, while also revisiting certain basic concepts in the economics of information and risk. The book consists of two parts. In Part I, several aspects of applied economics are investigated, including public policy, labor economics, and political economics, from the standpoint of the economics of (asymmetric) information. First, several basic frameworks of the incentive mechanism with regard to transaction-specific investment are assessed, then various tools for market design and organization design are explored. In Part II, mathematical measures of risk and risk aversion are examined in more detail, and readers are introduced to stochastic selection rules governing choice behavior under uncertainty. Several types of change in the random variable for the cumulative distribution function (CDF) and probability distribution function (PDF) are discussed. In closing, the part investigates the comparative static results of these changes in CDF or PDF on the general decision model, incorporating uncertain situations in applied economics.

This book, adopting machine learning techniques for the financial planning field, explores the demand for life insurance as seen in previous literature and both estimates and predicts the demand for the adoption of life insurance using these techniques. Previous studies used diverse perspectives, like actuarial and life span, in order to understand the demand for life insurance, though these approaches have shown inconsistent findings. Employing two theoretical backgrounds-ecological systemic theory and artificial intellectual methodology-this book explores a better estimation and a prediction of the demand for life insurance and will be of interest to academics and students of insurance, financial planning, and risk management.

This book offers fresh insights into the economic development and financial markets of Southeastern and Central European countries. The first part analyses macroeconomic trends and monetary policy issues, while the second part explores the development of financial and insurance markets. With contributions covering topics such as regional and income inequalities, economic embeddedness, industrial competitiveness, entrepreneurship, financial integration, insurance markets, and other socio-economic aspects, it appeals to scholars in the field of economics and finance interested in the further economic development of the Balkans and Eastern European countries as well as to professionals in the financial and insurance sectors.

This book summarizes the state of the art in tree-based methods for insurance: regression trees, random forests and boosting methods. It also exhibits the tools which make it possible to assess the predictive performance of tree-based models. Actuaries need these advanced analytical tools to turn the massive data sets now at their disposal into opportunities. The exposition alternates between methodological aspects and numerical illustrations or case studies. All numerical illustrations are performed with the R statistical software. The technical prerequisites are kept at a reasonable level in order to reach a broad readership. In particular, master's students in actuarial sciences and actuaries wishing to update their skills in machine learning will find the book useful. This is the second of three volumes entitled Effective Statistical Learning Methods for Actuaries. Written by actuaries for actuaries, this series offers a comprehensive overview of insurance data analytics with applications to P&C, life and health insurance.

This Volume of the AIDA Europe Research Series on Insurance Law and Regulation explores the key trends in InsurTech and the potential legal and regulatory issues that accompany them. There is a proliferation of ideas and concepts within InsurTech that will fundamentally change the market in the next few years. These innovations have the potential to change the way the insurance industry works and alter the relationships between customers and insurers, resulting in insurance products that are more closely aligned to individual preferences and priced more appropriately to the risk. Increasing use of technology in the insurance sector is having both a disruptive and transformative impact on areas including product development, distribution, modelling, underwriting and claims and administration practice. The result is a new industry, known as InsurTech. But while the insurance market looks to technology for greater efficiency, regulators are beginning to raise concerns about managing potential risks. The first part of the book examines technological innovations relevant for insurance, such as FinTech, InsurTech, Sharing Economy, and the Internet of Things. The second part then gathers contributions on insurance contract law in a digitalized world, while the third part focuses on cyber insurance and robots. Last but not least, the fourth part of the book discusses legal and ethical questions regarding autonomous vehicles and transportation, including the shipping industry, as well as their impact on the insurance sector and civil liability. Written by legal scholars and practitioners, the book offers international, comparative and European perspectives. The Chapters "FinTech, InsurTech and the Regulators" by Viktoria Chatzara, "Smart Contracts in Insurance. A Law and Futurology Perspective" by Angelo Borselli and "Room for Compulsory Product Liability Insurance in the European Union for Smart Robots?" by Aysegul Bugra are available open access under a CC BY 4.0 license at link.springer.com. All three open access chapters were funded by BIPAR.