This paper, instead of focusing on agency cost, analyzes the role of risk-sharing under problems of enforceability (default) to explain the optimal determination of capital structure. Optimal contract structure presents equity and debt.

The paper reviews the evolution in insurance economics over the past 25 years, by first recalling the situation in 1973, then presenting the developments and new approaches which flourished since then. The paper argues that these developments were only possible because steady advances were made...

This article examines, under the Dual Theory of Choice (Yaari (1987)), the classical results and their extensions on self-insurance, self-protection and market insurance obtained by Ehrlich and Becker (1972) under the expected utility hypothesis. In particular, background risk, non-reliability,...

Severe natural catastrophes in the early nineties have brought about a lack of financial capacity in the catastrophe line of the global reinsurance market. The finance industry reacted to this situation by issuing innovative products designed to spread the excess risk more widely among...

The future course of old-age mortality is of great importance to public sector expenditures in countries where old-age programs, such as Social Security and Medicare in the US, account for large fractions of the public budget. This paper argues that the competitive market prices of motality...

This paper uses direct evidence on the self-perceived and actual mortality risk of individuals, as well as the price and quantity of their life insurance, to evaluate whether asymmetric information is a barrier to trade in insurace markets.

This paper analyzes the savings and health care impacts of mortality contingent claims, defined here as income measures, such as annuities and life-insurance, under which earned income is contingent on the length of one's life. The postwar increase in mandatory annuity and life-insurance...

Exclusions are part of any property insurance. A prototypically simple contract covers losses from a single peril but excludes losses from all other perils and, typically, from the insured peril in some instances. Demand for insurance is impacted by exlcuded risks. There are two tendencies here:...

This paper studies optimal property insurance in the presence of equity risk and conversion risk. Equity risk is randomness of the value of a property. It tends to raise demand for conventional insurance on the property effectively increasing the risk aversion of the property owner. In contrast,...

Why is the cost of resolving insurance company failures so high? Evidence in this paper suggests that the state insurance regulatory bodies in charge of the liquidation process turn over an average of only 37 cents for each $1,00 of pre-insolvency assets to the guaranty funds.