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Resolving an Insurance Allocation Problem: A Procedural Approach

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Abstract

In this paper we study the problem of the determination of a fair allocation in a co-insurance problem, i.e., how some insurance companies have to share the risk and the premium. We develop two procedures that produce a proportional and an equitable allocation, respectively. The procedures are applied to a real situation arising from environmental risk and the resulting allocations are compared with the classical quota share allocation and with an envy-free allocation resulting from a procedure presented in Fragnelli and Marina (Insur. Math Econ 33:75–85, 2003).

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Authors and Affiliations

  1. Dipartimento di Economia e Metodi Quantitativi, Università di Genova, Genova, Italy

    Daniela Ambrosino & Maria E. Marina

  2. Dipartimento di Scienze e Tecnologie Avanzate, Università del Piemonte Orientale, Via V.Bellini 25/g, 15100, Alessandria, Italy

    Vito Fragnelli

Authors
  1. Daniela Ambrosino
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  2. Vito Fragnelli
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  3. Maria E. Marina
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Correspondence to Vito Fragnelli.

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Ambrosino, D., Fragnelli, V. & Marina, M.E. Resolving an Insurance Allocation Problem: A Procedural Approach. Soc Choice Welfare 26, 625–643 (2006). https://doi.org/10.1007/s00355-006-0108-0

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  • DOI: https://doi.org/10.1007/s00355-006-0108-0

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