Annals of Operations Research

, Volume 237, Issue 1–2, pp 263–279 | Cite as

A simple insurance model: optimal coverage and deductible



An insurance model, with realistic assumptions about coverage, deductible and premium, is studied. Insurance is shown to decrease the variance of the cost to the insured, but increase the expected cost, a tradeoff that places our model in the Markowitz mean-variance model.


Insurance Optimal coverage Deductible Markowitz mean-variance model 


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Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.Rutgers Center for Operations ResearchNew BrunswickUSA
  2. 2.Rutgers Center for Operations Research and School of BusinessNew BrunswickUSA

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