Journal article
The reduction of realised variance in deductible insurance
International journal of operational research, v 53(3), pp 310-323
2025
Abstract
We derive a series of mathematical identities that connect insurance purchasers with insurance companies. In particular, we focus on the way in which variance is shared between the parties. We argue that, from the perspective of governmental oversight, a desirable property of insurance is that the total amount of variance experienced by the involved parties is smaller under an insurance contract than in the uninsured case. It is shown that this always holds in the case of a single insurer and a single insured, while for the case of a single insurer and multiple insured, we derive a condition which guarantees the relationship.
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Details
- Title
- The reduction of realised variance in deductible insurance
- Creators
- Christopher Gaffney - Drexel University
- Publication Details
- International journal of operational research, v 53(3), pp 310-323
- Publisher
- Inderscience Publishers (IEL)
- Number of pages
- 14
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Decision Sciences (and Management Information Systems)
- Scopus ID
- 2-s2.0-105010502337
- Other Identifier
- 991022060952104721