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A simple insurance model: optimal coverage and deductible
Journal article   Peer reviewed

A simple insurance model: optimal coverage and deductible

Christopher Gaffney and Adi Ben-Israel
Annals of operations research, v 237(1-2), pp 263-279
01 Feb 2016

Abstract

Operations Research & Management Science Science & Technology Technology
An insurance model, with realistic assumptions about coverage, deductible and premium, is studied. Insurance is shown to decrease the variance of the cost to the insured, but increase the expected cost, a tradeoff that places our model in the Markowitz mean-variance model.

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