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Handbook of the Economics of Risk and Uncertainty
book

Handbook of the Economics of Risk and Uncertainty

by Mark Machina, W. Kip Viscusi
November 2013
Beginner content levelBeginner
896 pages
35h 10m
English
North Holland
Content preview from Handbook of the Economics of Risk and Uncertainty
Howard Kunreuther and Erwann Michel-Kerjan
684
11.5.1 Principles for Designing Insurance Policies
For insurance to play a key role in the management and financing of catastrophic risks,
we propose the following two guiding principles that are discussed in greater detail in
Kunreuther and Michel-Kerjan, 2011:
Principle 1 – Premiums Should Reflect Risk: Insurance premiums should be based
on risk to provide signals to individuals as to the hazards they face and to encourage
them to engage in cost-effective mitigation measures to reduce their vulnerability to
catastrophes. Risk-based premiums should also reflect the cost of capital insurers’ need ...
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Publisher Resources

ISBN: 9780444536853