The application of utility theory to insurance is incomplete without the inclusion of the structure of risk sharing; to limit the use of utility to accept or reject decisions misses its power to explain the real world of excess insurance and reinsurance. The fine subdivision of risk which is...

Insurance and Reinsurance companies, by underwriting risk portfolios not only across traditional insurance categories but also across national currencies, are assuming a new form of financial risk for which they have not yet developed the necessary risk management tools.