The Insurance Underwriter

While it should be obvious, it is often worth repeating is that the only reason investors should take risk is because they are paid to do so. High yield bond investors see this payment in the form of higher yields paid on riskier bonds, and insurers do this by charging higher premiums to insure riskier hazards. There are several other forms of investing and risk taking where this explicit statement of payment for risk taking is highlighted, and this chapter aims to describe those and their similarities and differences with the other chapters in this book.