Risk theory and the determination of solvency

Document description

The use of Risk Theory in General Insurance goes back an extremely long way. Barrows (1835) distinguished between the probability of a building catching fire and the amount consumed by fire once it had started. The general principles were used in life assurance models by Dormoy (1878). In 1903, Lundberg, in a doctoral thesis at Uppsala University, introduced the general concepts which have become established under the general title of Risk Theory.