New Risk Management Study Findings Have Been Reported by Investigators at Goethe-University Frankfurt (Insurability of Pandemic Risks): Risk Management

2021 DEC 22 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- A new study on Risk Management is now available. According to news originating from Frankfurt, Germany, by NewsRx correspondents, research stated, “This paper analyzes the scope of the private market for pandemic insurance. We develop a framework that explains theoretically how the equilibrium price of pandemic insurance depends on accumulation risk, covariance between pandemic claims and other claims, and covariance between pandemic claims and the stock market performance.”

Financial support for this research came from Projekt DEAL.

Our news journalists obtained a quote from the research from Goethe-University Frankfurt, “Using the natural catastrophe (NatCat) insurance market as a laboratory, we estimate the relationship between the insurance price markup and the tail characteristics of the loss distribution. Then, by using the high-frequency data tracking the economic impact of the COVID-19 pandemic in the United States, we calibrate the loss distribution of a hypothetical insurance contract designed to alleviate the impact of the pandemic on small businesses. The pandemic insurance contract price markup corresponds to the top 20% markup observed in the NatCat insurance market.”

According to the news editors, the research concluded: “Then we analyze an intertemporal risk-sharing scheme that can reduce the expected shortfall of the loss distribution by 50%.”

This research has been peer-reviewed.

For more information on this research see: Insurability of Pandemic Risks. Journal of Risk & Insurance, 2021;88(4):863-902. Journal of Risk & Insurance can be contacted at: Wiley, 111 River St, Hoboken 07030-5774, NJ, USA. (Wiley-Blackwell - http://www.wiley.com/; Journal of Risk & Insurance - http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1539-6975)

The news correspondents report that additional information may be obtained from Helmut Gruendl, Goethe-University Frankfurt, Int Ctr Insurance Regulat Icir, Theodor W Adorno Pl 3, D-60629 Frankfurt, Germany. Additional authors for this research include Danjela Guxha, Anastasia Kartasheva and Hato Schmeiser.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1111/jori.12368. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

(Our reports deliver fact-based news of research and discoveries from around the world.)