Abstract
This chapter will formulate a general theory of demand for fair index based insurance schemes by developing a model in which the key feature of an index based insurance, the correlation between an index and the insured’s loss, is incorporated in an explicit manner. Thereby, the necessity of a correlation between an index and personal loss as the crucial element is proven. Furthermore, previous results are extended onto a general level so that, in particular, a fair but not perfectly correlated index based insurance can merely yield partial coverage.
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© 2019 Springer Fachmedien Wiesbaden GmbH, part of Springer Nature
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Rödl, M. (2019). Demand. In: Contributions to the Economics of Index Based Insurance Schemes. Management, Organisation und ökonomische Analyse. Springer Gabler, Wiesbaden. https://doi.org/10.1007/978-3-658-25248-9_2
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DOI: https://doi.org/10.1007/978-3-658-25248-9_2
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Publisher Name: Springer Gabler, Wiesbaden
Print ISBN: 978-3-658-25247-2
Online ISBN: 978-3-658-25248-9
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