Insurance (INS)

Kenneth Froot, Director

From a theoretical perspective, insurance is a cornerstone of economic theory. It is often used in textbooks as an example of a pure contingent claim (for example, something that pays off upon flood damage to one's house, or due to death from natural causes). Also, It is frequently used as an example of a market that runs into imperfections (such as moral hazard or adverse selection). Even these imperfections are interesting, of course, because they are affected by contractual form (as is true in corporate finance). Thus, the nature and structure of insurance contracts and their equilibria remain of great interest to economists today.

The NBER's Working Group on Insurance has a broad focus, encompassing theoretical, empirical, and industrial topics including insurance customers and investors, insurance producers, insurance market equilibrium, and related policy questions .

The NBER Insurance Project is addressing these and related questions over time. We have convened once a year for a 2-day meeting where papers are presented by researchers and discussants comment on them. Participants in the Working Group are predominantly outstanding academics from a variety of fields, plus at times a group of carefully-selected practitioners.