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Managing a portfolio of risks

  • Annamaria OlivieriEmail author
  • Ermanno Pitacco
Chapter
  • 2k Downloads

Abstract

Basic ideas concerning risk pooling and risk transfer, presented in Chap. 1, are progressed further in the present Chapter, mainly with the following purposes:

1. to discuss key features of premium calculation when non-homogeneous portfolios are concerned, namely portfolios consisting of risks with various claim probabilities;

2. to analyze, more deeply, the riskiness of a portfolio and the tools which can be used to face potential losses, in particular introducing the role of the shareholders’ capital;

3. to illustrate the possibility, for an insurance company, to transfer, in its turn, risk of losses to another insurer, namely the possibility to resort to reinsurance;

4. to address dynamic aspects of the management of insurance portfolios.

As we will see, the actions undertaken by an insurer in order to deal with potential losses (see points 1 and 3 above) constitute important examples of risk management actions, in the specific framework of insurance risk management.

Keywords

Premium Rate Capital Allocation Total Payment Portfolio Size Premium Income 
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-Verlag Berlin Heidelberg 2011

Authors and Affiliations

  1. 1.Dipartimento di EconomiaUniversità di ParmaParmaItaly
  2. 2.Dipartimento di Scienze Economiche, Aziendali, Matematiche e StatisticheUniversità di TriesteTriesteItaly

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