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Vulnerability and mutual insurance

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  • Roland Eisen

    (Goethe University Frankfurt)

Abstract

Vulnerability comes, according to Orio Giarini, with two risks: human-made risks, also called entrepreneurial risks, and natural or pure risks such as accidents and earthquakes. Both types of risk are growing in dimension and are increasingly interrelated. To control the vulnerability, sophisticated insurance products are called for. Here, mutual insurance is relevant, in particular when risks are large, probabilities uncertain or unknown, and events interrelated or correlated. In this paper the following three examples are discussed and the advantages of mutual insurance are shown: unknown probabilities connected with unforeseeable events, correlated risks and macroeconomic or demographic risks.

Suggested Citation

  • Roland Eisen, 2021. "Vulnerability and mutual insurance," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 46(2), pages 224-235, April.
    • Handle: RePEc:pal:gpprii:v:46:y:2021:i:2:d:10.1057_s41288-021-00217-7
    DOI: 10.1057/s41288-021-00217-7
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    References listed on IDEAS

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