Demand for insurance in a portfolio setting

@article{Meyer1995DemandFI,
  title={Demand for insurance in a portfolio setting},
  author={Jack Meyer and Michael B. Ormiston},
  journal={The Geneva Papers on Risk and Insurance Theory},
  year={1995},
  volume={20},
  pages={203-211}
}
This paper takes an additional step toward analyzing the demand for insurance in the context of a portfolio model. An investor is endowed with a portfolio containing a risky and riskless asset that can be augmented by purchasing insurance. Here, insurance is paid for by reducing the quantity of the risky insurable asset, holding the quantity of the riskless asset fixed. In the standard insurance demand model, insurance is paid for by reducing the amount of the riskless asset. This distinction… CONTINUE READING