Developments in risk and insurance economics: The past 40 years

Abstract

The chapter reviews the evolution in insurance economics over the past 40 years, by first recalling the situation in 1973, then presenting the developments and new approaches which flourished since then. The chapter argues that these developments were only possible because steady advances were made in the economics of risk and uncertainty and in financial theory. Insurance economics has grown in importance to become a central theme in modern economics, providing not only practical examples to illustrate new theories, but also inspiring new ideas of relevance for the general economy.