Submitted:
02 November 2018
Posted:
02 November 2018
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Abstract
We use the theory of coherent measures to look at the problem of surplus sharing in an insurance business. The surplus share of an insured is calculated by the surplus premium in the contract. The theory of coherent risk measures and the resulting capital allocation gives a way to divide the surplus between the insured and the capital providers, i.e. the shareholders.
Keywords:
coherence
; monetary utility
; insurance benefit
; benefit sharing
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