6:00 PM Seminar Begins

7:30 PM Reception

Hybrid Event

Fordham University

McNally Amphitheater

140 West 62nd Street

New York, NY 10023

Free Registration!

For Virtual Attendees: Please select virtual instead of member type upon registration.

Abstract:

Why is there a general reluctance to buy insurance for low-probability-high-consequence risks and a preference for high-probability-low-consequence risk coverages? Using a regret-theoretical expected utility framework, we aim to shed light on such behavior. Regret theory posits not only that decision-makers experience regret following an ex-post “wrong” decision, but also that their anticipation of potential regret is integrated into their decision-making processes. Under regret, some risks are more regretful than others because the impact of regret aversion mainly kicks in at the extremes and so individuals will adjust optimal coverage accordingly. The often discussed failure of catastrophe insurance markets may be a consequence of this phenomenon.

Bio:

Annette L. Hofmann is the Great American Insurance Group Endowed Chair and Academic Director of the Lindner Center for Insurance and Risk Management at the University of Cincinnati’s Lindner College of Business. A recognized thought leader in insurance economics, behavioral risk management, and catastrophe risk financing, she has elevated the Lindner Center into a Global Center of Insurance Excellence designated by the International Insurance Society. She also serves as Editor-in-Chief of Risk Management and Insurance Review and Deputy Editor-in-Chief of the Journal of Risk and Insurance, shaping the scholarly discourse on emerging insurance and risk topics worldwide. Prior to joining UC, she held endowed professorships at St. John’s University’s Greenberg School of Risk Management in New York and full professorships in Hamburg, Germany, where she designed the country’s first MBA and BBA programs in Risk Management.

Her research explores behavioral and regulatory aspects of insurance decision-making, interdependent risks, and innovations in risk transfer, with publications in leading journals including the Journal of Risk and Insurance, Geneva Risk and Insurance Review, Insurance: Mathematics and Economics, and the Journal of Banking and Finance. A trilingual scholar with extensive industry engagement, she bridges academia and practice through partnerships with reinsurers, brokers, and foundations, and co-founded the Risk Management Education Foundation to advance literacy and leadership in the field.