Developments in Risk and Insurance Economics: The Past 50 Years

Abstract

The chapter reviews the evolution in risk and insurance economics over the past 50 years, first recalling the situation in 1973, then presenting the developments and new approaches that have flourished since then. We argue 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 and original data to illustrate new theories, but also inspiring new ideas that are relevant to the overall economy.

Keywords: Insurance economics, optimal insurance protection, optimal self-protection, insurance pricing, insurance demand, economics of risk and uncertainty, financial economics, risk management, asymmetric information, insurance markets, climate finance

JEL Classification: A33, B15, D10, D20, D80, D82, G22, G32, G52, L22