This article deals with the impact of governmental assistance on insurance demand under ambiguity, i.e., in situations where probabilities are uncertain. First, using a model of insurance demand under ambiguity, we derive theoretical predictions about the impact of several governmental...

Internal capital models are increasingly used across the insurance business, including reinsurance optimization, risk appetite and business planning. While this expansion is well documented, less is known about what modelers do in practice, in order to embed capital models within their...

This article presents the results of an experiment designed to test theoretical predictions about the impact of public compensation schemes and ambiguity on insurance and self-insurance decisions. Consistent with theory, we find that government assistance significantly reduces willingness to pay...