The sphere of insurable risks is increasing while the sphere of uninsurable risks
is narrowing, resulting in a positive shift of the insurability frontier.
The IRS argued that the arrangement did not meet these requirements because neither Feedback nor Pan American maintained sufficient reserves to meet its obligations, leaving the risk with the insured; Feedback had an insufficient pool of insureds to adequately distribute risk; the policies included uninsurable risks
; and Feedback and Pan American did not operate as insurance companies and did not determine the premiums on their policies at arm's length.
The division helps businesses transfer traditionally uninsurable risks
to a third-party balance sheet.
We are seeking similar opportunities to create value for our customers, and in some cases, for previously uninsurable risks
Nuclear power is a case in point having a raft of hidden subsidies, one of them being its uninsurable risks
. The US had to draft the Price-Anderson act to protect the industry from large-scale nuclear accidents.
Senior management must consider a more comprehensive risk management program to address a wide variety of insurable and uninsurable risks
More than two-thirds of risk managers surveyed say their companies now expect them to assist not only with insurable risks in the supply chain but also with assessing and addressing uninsurable risks
. And 66 percent say they are now responsible for providing risk management advice on strategic supply chain decisions, such as new product launches, sourcing decisions and warehouse locations.
In this sense, the infinite-horizon setting, while convenient, may understate the hardship caused by uninsurable risks
. In particular, the polar opposite of the dynastic model is the pure lifecycle model in which households care only about their own welfare, and not at all about the welfare of their children.
Russell, 1997, "Catastrophe Insurance, Capital-Markets, and Uninsurable Risks
", Journal of Risk and Insurance, 64:205-230
Risk management in the nonprofit sector is complicated by a number of issues, including the magnitude of uninsurable risks
facing a typical organization.
Under their simple model, they show that traditional theory holds only when the insurable and uninsurable risks
are statistically independent.
"Well," you might say, "those are business risks, not insurable risks." We all know that there are three categories of insurable risks: insurable, difficult to insure (such as flood and, perhaps, Y2K) and uninsurable risks
that do not fit the historic criteria for insurance, such as no snow, temperature fluctuations, swings in currency rates and, particularly, the stock market.