Recent Research Developments Affecting Nonlife Insurance—The CAS Risk Premium Project 2011 Update

• Published date: 01 March 2013
• Date: 01 March 2013
• DOI: http://doi.org/10.1111/rmir.12002
• Author: Martin Eling

Risk Management and Insurance Review

C

Risk Management and Insurance Review, 2013, Vol.16, No. 1, 35-46

DOI: 10.1111/rmir.12002

RECENT RESEARCH DEVELOPMENTS AFFECTING NONLIFE

INSURANCE—THE CAS RISK PREMIUM PROJECT 2011

UPDATE

Martin Eling

ABSTRACT

This article summarizes the results of the 2011 Risk Premium Project (RPP) con-

tinual update. The aim of RPP is to review the actuarial and finance literature on

the theory and empirics of risk assessment for property–casualty insurance. We

find that behavioral insurance and new instruments of alternative risk trans-

fer are popular fields of research in nonlife insurance. Capital allocation and

enterprise risk management, too, are currently very important research topics.

Moreover,the financial crisis has stimulated new work on corporate governance

and insurance.

BACKGROUND

The Risk Premium Project( RPP) is an extensive analysis of the theory and empirics of risk

assessment in property–casualty insurance. The project was initiated by the Committee

on Theory of Risk (COTOR) of the Casualty Actuarial Society and began in 2000 with

RPP I, a review of actuarial and finance research conducted up to that point in time.

Given the vast development of research in both finance and actuarial science, RPP II was

undertaken in 2010 in order to extend the findings from RPP I by adding research done

in the last decade.

The result was the RPP II report, a detailed analysis of extant research and areas needing

further research. A searchable website with all review results has been developed and

can be accessed at www.casact.org/rpp2. The central element of the website is the

searchable RPP II database, which contains almost 1,000 references to papers structured

into 11 thematic groups. The thematic categories were developed by incorporating the

opinions of academics and practitioners, and, especially, feedback from COTOR.

Martin Eling is Professor of Insurance Management and Director of the Institute of Insurance

Economics at the University of St. Gallen, Kirchlistrasse 2, 9010 St. Gallen, Switzerland; e-mail:

martin.eling@unisg.ch. The author is grateful for all the comments received, especially by the

Committee on the Theory of Risk (COTOR) of the Casualty Actuarial Society. The author also

thanks for the financial support received by the Casualty Actuarial Society and Christian Biener

for his research support. Special thanks go to Richard Derrig. This article was subject to double-

blind peer review.

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