Insurance: Opportunities and Vulnerabilities in Risk Management

Explore the fundamental concepts and challenges of the insurance industry in this comprehensive lecture from Yale University's Financial Markets course. Delve into risk pooling, moral hazard, and selection bias as key principles. Trace the history of American International Group (AIG) from its inception to its 2008 government bailout. Examine insurance industry regulations, including state guarantee funds, the McCarran-Ferguson Act, and the Dodd-Frank bill's impact. Focus on life and health insurance branches, discussing the effects of the 2010 U.S. healthcare overhaul. Analyze insurance practices for catastrophic events, using examples from Haiti and Mexico. Conclude with a critical reflection on the insurance industry's role in managing large-scale disasters. Gain valuable insights into this archetypal risk management institution, its opportunities, and vulnerabilities over the course of 1 hour and 13 minutes.