We investigate the benefits of risk pooling for the policyholders of stock insurance companies under different solvency standards. Using second‐degree stochastic dominance, we document that the utility of risk‐averse policyholders is increasing in the pool size if the equity capital is...

We analyze hedging strategies that minimize tail risk measured by Value-at-Risk (VaR) or Conditional-Value-at-Risk (CVaR). In particular, we derive first-order conditions characterizing VaR- and CVaR-minimal hedging with futures in regime-switching models. Using cross-hedging examples, we...