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On Insurer Portfolio Optimization. An Underwriting Risk Model

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Author Info
Preda, Vasile (Ph.D. Prof. and CP1, University of Bucharest, Faculty of Mathematics and Computer Science and the National Institute for Economic Research (INCE))
Ciumara, Roxana () (Department for Mathematics, Academy of Economic Studies)
Abstract

Multicriteria portfolio optimization started with the Markowitz mean-variance model (Markowitz 1952, 1959). This model assumes that the goal of an average or standard investor is to maximize the unknown return on investment. In this paper we propose a risk model related to insurance industry. The optimality criteria we propose for insurer’s portfolio optimization are based on the well-known Markowitz model, yet imposing scalarization on the components of the objective function.

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Publisher Info
Article provided by Institute for Economic Forecasting in its journal Romanian Journal of Economic Forecasting.

Volume (Year): 5 (2008)
Issue (Month): 1 (March)
Pages: 102-118
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Handle: RePEc:rjr:romjef:v:5:y:2008:i:1:p:102-118

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Related research
Keywords: portfolio optimization; underwriting risk; scalarization.;

Find related papers by JEL classification:
C16 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Econometric and Statistical Methods; Specific Distributions

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  1. Morita, Hiroshi & Ishii, Hiroaki & Nishida, Toshio, 1989. "Stochastic linear knapsack programming problem and its application to a portfolio selection problem," European Journal of Operational Research, Elsevier, vol. 40(3), pages 329-336, June. [Downloadable!] (restricted)
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