Efficient insurance contracts redefine risk measures for better financial protection.
The article explores how insurance contracts can help manage risks efficiently. The researchers found that a mix of average and Expected Shortfall (ES) is a key risk measure for both the insured and the insurer when using contracts with deductibles. This means that these types of contracts can provide a good balance of protection for both parties. Other risk measures, like the mean and distortion risk measures, were also linked to different types of contracts in the study.