This paper presents a universal framework for pricing financial and insurance risks. Examples are given for pricing contingent payoffs, where the underlying asset or liability can be either traded or not traded. The paper also outlines an application of the framework to prescribe capital allocations within insurance companies, and to determine fair values of insurance liabilities. 1 SCOR Reinsu...

Likely driven by continuing health reform efforts and the flight of physicians from administrative detail and operating risk, statistics indicate that the number of physicians in private practice has declined notably over the past 10 years. By the time the Affordable Care Act was upheld by the U.S. Supreme Court on June 28, 2012, at least one industry source was estimating that the number of ph...

to successfully defend a single claim of malpractice would likely exceed the annual premium for liability insurance, and this fact alone makes malpractice insurance a sound business expense. Unfortunately, it’s one that growing numbers of physicians can’t afford. Physicians and patients in 20 states are facing a “full-blown medical liability crisis” (up from 12 states two years ago), and at lea...

During the past three decades, medical malpractice insurance has experienced periodic crises of lack of available coverage and/or increased price of coverage.1 One solution in some states has been the implementation of public medical malpractice insurance plans, the most common type being Patient Compensation Funds (PCFs).2 By definition, PCFs offer insurance for medical malpractice liability t...