Insurability
Under insurability ( English insurability ) are understood in insurance and in the economy can selectively risks the insurance coverage one insurer to submit.
General
Not all types of risk that arise in everyday life can be insured, but must be borne by the risk taker themselves. If the risk bearer wishes the risk to be transferred to an insurer, the insurer must assess the insurability of the risk. The insurance market plays a major role in risk transfer. If both market participants ( policyholder and insurance company ) achieve a net benefit , an insurance contract is concluded . If the insurance demand is unsatisfied, the policyholder's premium offers are too low; if the insurance offer is not accepted, the insurer's premium claims are too high. As long as a sufficiently high premium can be achieved, risks are also insured. In mathematical terms, the premium rate must be higher than the probability of damage and the security and operating costs surcharge :
- .
The limits of insurability can therefore not only be determined by actuarial criteria, but also by economic ones.
Economic characteristics of insurability
However, given demand , there can be no supply at all ( supply gap ). This is because that the insurer of the negatively assesses the characteristics of risk to be insured and a risk as uninsurable classifies. The characteristics of insurability include randomness , estimation , uniqueness , independence and size characteristics of the damage distribution , in particular damage sizes. Randomness is the necessary uncertainty about the occurrence and / or time and / or size of the damage and the independence of the insured event from the will or influence of the policyholder. Often negligence is also insured, sometimes gross negligence is also insured ( e.g. liability insurance ) or even intent (e.g. suicide in life insurance after a waiting period ). The estimate of the loss distribution makes use of the expected value and the spread and examines the loss potential ; the unambiguity results from the types of insurance and there the exact definition of the insured loss events . The insured distributions of damage are independent of one another, unless an event accidentally triggers the realization of the damage in other insured cases (as with accumulation ). However, certain dependencies are considered insurable. In terms of the amount of damage, the quantitative limit of insurability has been reached for the probable maximum damage .
Insurance theory approaches
With the empirical-inductive approach , a risk is considered insurable if it can actually be insured on the insurance market. The theoretical-deductive approach makes use of the fact that there is initially no insurance protection on the insurance market for new types of risk (increasing natural disasters , terrorism risks or environmental risks ), but insurance solutions are found over time. The deductive approach tries to clarify in the abstract which characteristics a risk must meet in theoretical terms in order to be insured. Another factor that affects insurability is an insurer's risk appetite . If he is risk averse , he will not insure new risks; it is the other way around with willingness to take risks .
The following catalog covers the criteria of insurability:
| category | criteria | property |
|---|---|---|
| Actuarial |
Risk / uncertainty Damage events Maximum damage Average damage Damage frequency Moral hazard , adverse selection |
measurable independently controllable moderate high not pronounced |
| Insurance market |
Insurance premium coverage limits industry capacity |
reasonable acceptable sufficient |
| society |
moral order of values legal system |
Insurance need permission |
Regulatory requirements
In 1981, the former Federal Insurance Supervisory Office had always refused to insure ransom demands ( ransom insurance ) from kidnapped or threatened people as a violation of public policy ( immorality according to Section 138 (1) BGB ; Article 6 EGBGB ) because it poses a risk of extortion kidnapping would be promoted. A violation of public policy was also assumed in cases in which insurers wanted to compensate the extorted companies for payment of protection money to avoid product poisoning, etc. in the context of recall and product protection insurance .
This general rejection was given up in July 1998 by the current insurance supervisory authority BaFin , if the operation of this insurance is in accordance with public policy. It must be taken into account that these insurance contracts, which are particularly sensitive, require a high degree of confidentiality and do not hinder the police's investigative work. In addition, collusive interaction between perpetrators , victims or employees of the insurer must be avoided; The insurers also have to meet other requirements.
The examination of insurability by the insurance supervisory authority is therefore carried out using the same insurance company criteria of insurability, because the violation of public policy affects the moral order of values and the legal system in Germany. The legal basis is Section 294 (2) VAG , according to which the supervisory authority monitors the entire business of the insurer. According to Section 298 (1) VAG, the supervisory authority can take all measures that are suitable and necessary to avoid or eliminate grievances. This also includes the prohibition of new types of insurance.
economic aspects
An event that occurs with certainty cannot be meaningfully insured because the risk premium would have to correspond to the amount of the (certain) damage; in addition there would be the administrative costs . On the other hand, an event that is certain not to occur does not require a promise of protection; the occurrence of damage must therefore be shaped by chance. Objective insurability consists of all the risks that would be covered by professional risk carriers who are actually eligible for their cover . If the insurability of certain risks is denied by the insurance industry , the risk carriers have the alternative of other risk management , self-insurance or non- insurance .
Individual evidence
- ↑ Dieter Farny, Versicherungsbetriebslehre , 2006, p. 37
- ↑ Alfred Endres / Reimund Schwarze, Are there limits to the insurability of environmental risks? , in: Alfred Endres / Eckard Rehbinder / Reimund Schwarze (Eds.), Liability and Insurance for Environmental Damage from an Economic and Legal Perspective, 1992, p. 87
- ↑ Dieter Farny, Versicherungsbetriebslehre , 2006, p. 38
- ↑ Dieter Farny, Versicherungsbetriebslehre , 2006, p. 38
- ↑ Dieter Farny, Versicherungsbetriebslehre , 2006, p. 39
- ↑ Baruch Berliner , The Limits of the Insurability of Risks , 1982, p. 11 ff.
- ↑ Tristan Nguyen, Limits to the Insurability of Disaster Risks , 2007, p. 86
- ↑ Hannah Teschabai-Oglu, The Insurability of Emerging Risks in Liability Insurance , 2012, p. 45
- ↑ Baruch Berliner, The Limits of the Insurability of Risks , 1982, p. 11 ff.
- ↑ Federal Insurance Supervisory Office, Annual Report , 1981, p. 31 No. 141
- ↑ BaFin circular 3/1998 (VA) of July 21, 1998, information from the BAV on the operation of ransom insurance, reference IV 2-41521 - 1/98
- ↑ BaFin of February 28, 2019, The Insurance Collective in Times of Big Data and Artificial Intelligence
- ↑ Baruch Berliner, insurability , in: Dieter Farny / Elmar Helten / Peter Koch / Reimer Schmidt (eds.), Handwortbuch der Versicherung HdV, 1988, p. 951
