Risk-Spreading through Underwriting and the Insurance Institution

  • J. D. Hammond
Part of the General Motors Research Laboratories book series (RLSS)


The insurance underwriting decision process is often viewed as scientific, precise, and capable of accurate risk assessment. In fact, it is frequently influenced by competitive forces, the availability of reinsurance, and the judgment of underwriters. Inflation and changing social values also add to underwriting uncertainty by causing claims distributions to be unstable over time.

The financial stability of insurers to take risks is affected by the level of surplus and the stability of the underwriting portfolio. The latter is affected by the mix of insurance lines underwritten. Portfolio theory provides a helpful frame of reference for the evaluation of underwriting portfolios.


Portfolio Theory Claim Frequency Combine Ratio Claim Distribution Claim Experience 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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Copyright information

© Springer Science+Business Media New York 1980

Authors and Affiliations

  • J. D. Hammond
    • 1
  1. 1.The Pennsylvania State UniversityUniversity ParkUSA

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