Peer-to-peer insurance and risk sharing

Abdikerimova, Samal

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https://hdl.handle.net/2142/115545 Copy

Description

Title

Peer-to-peer insurance and risk sharing

Author(s)

Abdikerimova, Samal

Issue Date

2022-04-18

Director of Research (if dissertation) or Advisor (if thesis)

Feng, Runhuan

Doctoral Committee Chair(s)

DeVille, Lee

Committee Member(s)

• Chong, Alfred
• Linders, Daniel

Department of Study

Mathematics

Discipline

Mathematics

Degree Granting Institution

University of Illinois at Urbana-Champaign

Degree Name

Ph.D.

Degree Level

Dissertation

Keyword(s)

• P2P insurance
• risk sharing
• mutual aid

Abstract

In this thesis we demonstrate different applications of peer-to-peer (P2P) risk sharing strategies. First, we present a variety of P2P insurance/mutual aid models that facilitate the exchange of multiple risks and enable peers with different needs to financially support each other in a transparent and fair way. P2P insurance is a decentralized network in which participants pool their resources together to compensate those who suffer losses. It is a revival of a centuries-old practice in many ancient societies. Second, we extend the above risk sharing strategy to a multi-period case. In this case participants start with (different) initial reserves. Then reserves at any time period are updated by subtracting exchanged losses of the current period from the reserves of the last period. Loss exchange rules are obtained by maximizing the weighted sum of the expected reserves minus a weighted sum of the second moments of the reserves. Third, we present an alternative to the World Bank's pandemic bond design by introducing a P2P structure. While preserving the mechanism of pandemic contingent debt instrument, the P2P structure offers more flexibility with payment triggers catering to the needs of individual countries and better inclusion of co-funding agencies beyond bond investors. The work is intended to bring fresh perspectives to the ongoing debate on the development of international framework for health emergency preparedness and response.

Graduation Semester

2022-05

Type of Resource

Thesis

Copyright and License Information

Copyright 2022 Samal Abdikerimova

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