What should be the fair premium of an insurance policy?
DOI:
https://doi.org/10.24310/Contrastescontrastes.v27i2.13045Keywords:
Actuarial fairness, mathematical expectation, shared uncertainty, contractualismAbstract
Traditionally, the premiums of the insurance contracts have been considered fair when they mirror exactly the risk of the policies, measured as the mathematical expectation of their claims. In this paper we criticize this seemingly objective approach and we propose an alternative justification for the actuarial fairness, based on contractualist arguments. We build on some intuitions of the 17th French jurist Jean Domat about the shared uncertainty among the stakeholders, in the general framework of the contractualist theory of the contemporary philosopher and economist Robert Sugden.
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