A standard result states that under decreasing absolute risk aversion the indifference premium of the insured is a decreasing function of wealth. This has been interpreted to mean that insurance is an inferior good, which has been considered as a puzzle in insurance theory, in particular since the result does not seem to explain observed behavior in insurance markets. We reformulate the standar...

OBJECTIVE To determine the life and health insurability and employability of young adults with congenital heart disease. DESIGN Questionnaire study. SETTING Cardiac department of a tertiary referral hospital for children. PATIENTS Young adults 18-30 years old with a variety of congenital heart defects, both simple and complex, including postoperative patients. MAIN OUTCOME MEASURES Avai...

Nat Cat risks are not insurable by traditional insurance mainly because of producing highly correlated losses. The source such correlation among buildings a region subject to natural hazard is discussed. A decomposition method proposed split risk into idiosyncratic (and hence insurable) and systematic (carrying the part). It explained that can be transferred capital markets using set parametric...

Background risk can influence the performance of insurance markets that must deal with adverse selection when applicants are risk vulnerable, since they are more averse to bearing the insurable risk as a result of their exposures to background risk. We show that background risk always results in a lower deductible for the incentive constrained contract, and that a broader range of markets attai...

The reset right embedded in a derivative refers to the feature that the holder can alter certain terms in the derivative contract according to some preset rules. In this paper, we consider options that allow the holder to reset the strike price with preset number of times at any moment during the life of the option. The determination of the optimal reset policies adopted by the holder leads to ...

Insurability is a major issue for risk managers in the insurance industry. Zajdenweber (1996) mentioned that business interruption is hardly insurable, using extreme value results: the right tail of the distribution should be modeled using some Pareto distribution with parameter 1, which has none finite moment. Since the expected value in tails is infinite, on a theoretical point of view, it be...

This research is entitled a comparative study of the principles sharia insurance according to Islamic law and Law No. 40 2014 concerning insurance. In its operations, in addition complying with legal terms agreement, must also comply law. The purpose these provide framework within which all parties transaction will receive fair proper treatment. aims discuss Islam by conducting expected find si...