Basic Economic Theory For an Insurer's Rate of Return and For Its Regulation

Up to the present, insurance researchers and theorists have tried to devise a special economic theory of insurance rather than trying to fit insurance operations into the existing economic theory. The theme of this paper is that there is not and need not be a special economic theory of risk, of insurance, or of insurers. Managerial theory fully and precisely covers the entrepreneurial (including risk-creating and risk-assuming) factor of production. Insurance, as a part of security management, has already been fully fitted into managerial theory.