Financial Markets with Robert Shiller: 5. Insurance: The Archetypal Risk Management Institution (26 lectures, Yale)

Financial Markets (ECON 252) Insurance provides significant risk management to a broad public, and is an essential tool for promoting human welfare. By pooling large numbers of independent or lowcorrelated risks, insurance providers can minimize overall risk. The risk management is tailored to individual circumstances and reflects centuries of insurance industry experience with real risks and with moral hazard and selection bias issues. Probability theory and statistical tools help to explain how insura