Behavioural economist proposes radical shake-up to low-probability high-consequence insurance
There are several markets in which insurance works relatively well, such as term life, motor collision and homeowners’, but there are other sectors, those with a low probability of occurring but a high consequential loss when they do occur (LP-HC), where the insurance sector does not perform well, claimed Professor Howard Kunreuther, co-director of the Risk Management and Decision Processes Center, Wharton School, University of Pennsylvania, on the first day of the Insurance Day Summit Bermuda