Insurance Risk Management And Public Policy

Five years ago the world lost one of its most prolific insurance scholars, Dr. Robert I. Mehr. His death in 1988 signalled the passing of not only a gifted writer and researcher, but also a pioneering teacher, mentor, and friend. The essays compiled within this volume are intended as an appropriate tribute to this occasionally outrageous individual who touched the lives of so many within the insurance community. Bob Mehr was a teacher who expected and demanded nothing less than perfect scholarship and flawless, efficient writing. Among alumni of the University of lllinois insurance doctoral program, stories still abound of late night and early morning sessions in which students and professor painstakingly debated precise words and phrases for dissertations, journal articles, and textbooks. Bob's respect for language was both immense and contagious, if at times more than a little compulsive. He joked that he could not read letters or novels without pencil in hand for editing. Bob's respect for his doctoral students was equally evident. The confidence he displayed in his students' abilities was sometimes startling, but "competence assumed" often begot "competence in fact." The accomplishments and records amassed by the many who studied with Bob Mehr are impressive and ongoing. On the dedication page in his final textbook, Fundamentals of Insurance, Bob spoke of his affection for those he called his "academic progeny" and wished them happiness as they build their own academic families.

For many years, introductory insurance textbooks presented insurance as a subject based in contracts. Slowly, the course has moved toward a consumer orientation, providing students with a broad, descriptive survey of the insurance field, covering topics such as legal aspects, life and health, and property and liability. Over the past 10 years, textbooks began to promote, and to a limited degree, incorporate a stronger business risk management component while maintaining a consumer orientation. Harrington/Niehaus' Risk Management and Insurance 2e is written to take the next step offering the essential aspects of insurance contracts and the insurance industry while providing a substantially more conceptual analysis and attention to business risk management and public policy issues that exists in current texts.

In this book the authors demonstrate how the economics of insurance, risk reduction, and damage control or limitation can be combined with concepts of collective choice and collective behavior to improve analysis of the escalating threats faced by alliances throughout the world. The book develops a theory of risk management as integrating likelihood of loss, magnitude of loss, and isolation from loss into a consolidated model. It extends existing concepts of individual risk management by a single person to decision theory for an entire country, managed by a government bureaucracy and lodged in a universe of overlapping alliances. The authors uncover a tendency, inherent in any bureaucracy for policy coordination in the realm of risk control to fail because of misunderstanding, disinterest, or perverse incentives. Understanding such incentives is essential to any sort of progress in risk management of proliferating national and global threats. Self-protection aims to reduce the chances of loss. This reduction may require the use, or threat or promise of use, of defensive military weapons or, depending on context, the use of offensive military weapons. Japan's constitution limits Japan to use of defensive measures only, even if Japan and the USA have formed a military alliance. This places Japan at an “economic corner solution” of providing only self-insurance. However, the Abe government intends to change the interpretation of the constitution so that Japan can provide a full range of self-protection as well as self-insurance. With the prospect of such constitutional change, this book becomes of special relevance to Japan's national security.

This book provides an in-depth understanding of international risk management and insurance, their dynamics, and the economic, social, political, and regulatory environments surrounding global risk and insurance markets.· Introduction· Factors Shaping the Risk Environment Internationally· Enterprise Risk Management in a Global Economy· Insurance in a Global Economy· Conclusions

Is "risk" the enemy or is it necessary? What is risk management? How does insurance fit into the concept of risk management? This book defines risk, discusses the theory of risk management, details the risk management process, and delves into insurance and its rightful place within risk management and the risk management process. Included in this book are discussions of insurance regulation, negligence theories, theories of legal liability, and the premium audit process and rules. The capstone of this book is the last chapter. This chapter gives readers the 12 "rules" or guidelines necessary to read and understand ANY insurance policy. All experience levels can benefit from the concepts discussed in this book. In fact, even those not in the insurance industry will find this book useful, especially if their job involves managing risk.

Covering the essential aspects of insurance contracts and the insurance industry, this text also provides a conceptual analysis and pays attention to business risk management and public policy issues.

Insurance Economics brings together the economic analysis of decision making under risk, risk management and demand for insurance among individuals and corporations, objectives pursued and management tools used by insurance companies, the regulation of insurance, and the division of labor between private and social insurance. Appropriate both for advanced undergraduate and graduate students of economics, management, and finance, this text provides the background required to understand current research. Predictions derived from theoretical arguments are not merely stated, but also related to empirical evidence. Throughout the book, conclusions summarize key results, helping readers to check their knowledge and comprehension. Issues discussed include paradoxes in decision making under risk and attempts at their resolution, moral hazard and adverse selection including the possibility of a “death spiral”, and future challenges to both private and social insurance such as globalization and the availability of genetic information. This second edition has been extensively revised. Most importantly, substantial content has been added to represent the evolution of risk-related research. A new chapter, Insurance Demand II: Nontraditional Approaches, provides a timely addition in view of recent developments in risk theory and insurance. Previous discussions of Enterprise Risk Management, long-term care insurance, adverse selection, and moral hazard have all been updated. In an effort to expand the global reach of the text, evidence and research from the U.S. and China have also been added.

One of the most important functions of government—risk management—is one of the least well understood. Moving beyond familiar public functions—spending, taxation, and regulation—Moss spotlights government's pivotal role as a risk manager, revealing the nature and extent of this function, which touches almost every aspect of economic life.