Constructing Insurable Risk Portfolios

<p><b>Constructing Insurable Risk Portfolios</b> offers a data-driven approach to devising risk retention programs that safeguard firms from a multitude of risks. Because firms face many risks including fire damage to their buildings liability from management misconduct and external threats like cyberattacks this book treats these potential liabilities as a portfolio. Drawing inspiration from Markowitz portfolio theory the text leverages techniques from probability statistics and optimization to build algorithms that construct optimal risk insurable portfolios under budget constraints.</p><p>Features</p><ul> <li>Through engaging case studies and supporting statistical (R) code readers will learn how to build optimal insurable risk portfolios.</li> <li>This book illustrates a frontier that depicts the trade-off between the uncertainty of a portfolio and the cost of risk transfer. This visual representation mirroring familiar Markowitz investment tools enables informed decision-making and easy adoption by risk advisors.</li> <li>This book lays the mathematical groundwork for constructing optimal insurable risk portfolios in an effective and aesthetically pleasing manner.</li> <li>For those interested in the detailed mathematical aspects of insurable risk portfolio optimization comprehensive proofs and derivations are available in an online supplement.</li> </ul><p>This book equips students academics and practitioners with quantitative tools to analyze real-world risk portfolios. Additionally it empowers financial analysts to provide data-driven insights that enhance their advisory roles for risk managers.</p>