Financial pricing of insurance

Abstract

The financial pricing of insurance refers to the application of asset pricing theory, empirical asset pricing, actuarial science, and mathematical finance to insurance pricing. In this chapter we unify different approaches that assign a value to insurance assets or liabilities in the setting of a securities market. By doing so we present the various approaches in a common framework that allows us to discuss differences and commonalities. The presentation is done as simply as possible while still communicating the important ideas with references pointing the reader to more details.