Short Course

Short Courses on Decentralized Insurance and Risk Sharing


While risk sharing has been a classical topic for decades in the actuarial literature, there has been revived interest on risk sharing among multiple stakeholders in decentralized fashions or with distributed technologies. The purpose of this short-course series is to bring attention to emerging topics in this area. It is intended for graduate students and academics with interests and offered at an introductory level. Participants can learn about the current state of decentralized insurance and latest academic work in decentralized risk sharing. The series consists of four short courses, to be delivered by four speakers.

Slides download links: Marco Mirabella (slides); Jan Dhaene (slides); Arthur Charpentier (slides)

Marco Mirabella

Title: Decentralized Finance and Blockchain: Implications for the Insurance Industry

Abstract: This presentation will examine the leading blockchain platforms and their most prominent decentralized finance (DeFi) protocols, exploring the potential impacts on the financial sector, with a focus on the insurance and reinsurance industry. We will analyze how DeFi protocols could disrupt the insurance value chain, presenting both opportunities and challenges. Major decentralized insurance protocols will be introduced, shedding light on their underlying operational models. As a case study, we will take a deeper look at Ensuro, a decentralized capital provider for parametric risk coverage. Key concepts like crypto-backed stablecoins, liquidity pools, decentralized asset management, and the role of decentralized oracles in claims processing will be explained in the context of Ensuro’s approach. The presentation aims to equip audiences with insights into this emerging intersection of blockchain, DeFi, and the insurance realm.

Biography:  Marco Mirabella is the CEO of Ensuro, a decentralized reinsurance company licensed by the Bermuda Monetary Authority. Prior to Ensuro, Marco was the Chief Strategy Officer at BigGo, the biggest price comparison website in South East Asia. Marco is also the founder of Cartesi, a layer2 blockchain solution. He started his career in the venture capital space, working for SOSV a US$ 1b AUM venture capital fund.

Jan Dhaene

Title: Decentralized risk sharing: definitions, properties, and characterizations

Abstract: In this mini-workshop, we give an overview of some recent results on decentralized risk-sharing, i.e. pooling risks without a central insurer. We consider risk-sharing pools, where each participant is compensated from the pool for his loss and pays in return an ex-post contribution to the pool. The contributions of the participants follow from an appropriate risk-sharing rule, which is chosen such that the pool is self-financing. We introduce and discuss a list of relevant properties of risk-sharing rules. A number of candidate risk-sharing rules are considered, including the simple uniform risk-sharing rule, as well as the conditional mean risk-sharing rule and the quantile risk-sharing rule. Their compliance with the proposed properties is investigated. Also, axiomatic characterizations of the above-mentioned risk-sharing rules are considered.

Biography: Jan Dhaene is a full professor in actuarial science with the Research Centre Insurance, Department Accountancy, Finance and Insurance at the Faculty of Economics and Business, KU Leuven. His main current research interests are in risk management for financial institutions, integrating financial and actuarial models and decentralized risk-sharing. He has published over 150 scientific papers in refereed journals. Together with R. Kaas, M. Goovaerts and M. Denuit, he is co-author of ‘Modern Actuarial Risk Theory’ (Kluwer, 2001), ‘Modern Actuarial Risk Theory – Using R’ (Springer, 2008), ‘Actuarial Theory for Dependent Risks – Measures, Orders and Models’ (Wiley, 2005). He has been co–chair holder of the Fortis Chair in Financial and Actuarial Risk Management (2006- 2009) and chairholder of the AG Insurance Chair in Health Insurance (2010-2019) at KU Leuven. He has held visiting appointments and/or has been teaching at University of Antwerp (Belgium), University of Ghent (Belgium), University of Amsterdam (The Netherlands), Warsaw University (Poland), University of the Free State (Bloemfontein, South Africa), University of Sao Paulo (Brasil), University of New South Wales (Sydney, Australia), University of Ljubljana (Slovenia), Université de Lausanne (Switzerland), Duisenberg School of Finance (Amsterdam, The Netherlands), Institut Supérieur de Management Adonaï (Cotonou, Benin), Université d’Abomey-Kalavi (Cotonou, Benin), Central University of Finance and Economics (Beijing, China), Tsinghua University (Beijing, China), University of Turin (Turin, Italy), Universitas Padjadjaran (Bandung, Indonesia), Kyoto University (Kyoto, Japan), University of Bologna (Bologna, Italy) and University of International Business and Economics (Beijing, China). He is an Associate Editor of Insurance: Mathematics & Economics (since 2000), a member of the Editorial Board of ASTIN Bulletin (since 2007), Advisory Editor of Journal of Computational and Applied Mathematics (since 2008), Associate Editor of Istatistik, Journal of the Turkish Statistical Association (since 2012), Associate Editor of Journal of the Iranian Statistical Society (since 2018), Editor-in-Chief of the Iranian Journal of Risk and Insurance (since 2018) and Associate Editor of North American Actuarial Journal (since 2019). He is a member of IA|BE (Institute of Actuaries of Belgium) and I.A.A. (International Actuarial Association).

Arthur Charpentier

Title: Collaborative insurance, unfairness, and discrimination

Abstract: In this course, we will get back to mathematical properties of risk sharing on networks, with reciprocal contracts. We will discuss conditions about stochastic dominance, proving that policyholders might have interest in sharing risks with “friends”. Then, we will try to address fairness issues, for such risk sharing mechanisms. If fairness has been recently intensively studied, either through group or individual fairness, there are yet not much literature about fairness on networks. It is important to address those issues since perceived discrimination is usually associated with networks. We will see why the topology of the network is important, both to design peer-to-peer schemes to share risks, but also to see if perceived discrimination is associated with global disparate treatment.

Biography: Arthur Charpentier, PhD, Fellow of the French Institute of Actuaries, is full professor at UQAM, Montreal, Canada, and Université de Rennes, in France. He is member of the editorial board of the Journal of Risk and Insurance, the ASTIN Bulletin, and Risks. He edited, a few years ago, Computational Actuarial Science with R (CRC), and more recently wrote Insurance, Biases, Discrimination and Fairness (Springer). He is also the former director of the Data Science for Actuaries program of the French Institute of Actuaries. He is a Louis Bachelier Fellow, and his recent work is about climate change and predictive modeling insurance, more specifically in the context of fairness and discrimination.

Runhuan Feng

Title: Decentralized insurance: bridging the gap between industry practice and academic theory

Abstract: In this final segment of the short course, we shall explore from an academic perspective various business models of tokenomics within DeFi insurance protocols. The objective is to establish a theoretical framework that bridges academic theories of risk-sharing with practical applications in DeFi insurance and risk management mechanisms.

Biography: Feng is currently a Chair Professor in the School of Economics and Management in Tsinghua University. Prior to that, he was a Professor of Mathematics, Statistics and Industrial Engineering, State Farm Companies Foundation Endowed Professor, Director of Actuarial Science and the Founding Director of Predictive Analytics and Risk Management in the University of Illinois at Urbana-Champaign in the United States. Feng was also the Faculty Lead for the Finance and Insurance Sector at the University of Illinois System’s Discovery Partnership Institute.