Jametti, Mario; Ungern-Sternberg, Thomas von - CESifo - 2006
It is widely recognized that “market failure” prevents efficient risk sharing in natural disaster insurance. As a …-private partnerships. We define risk selection as a situation where private companies pass insurance of high risk agents on to the public … premium rate in both high and low risk regions and the existence of a state reinsurer. We show that in our model, risk …