A Resilience-Based Framework for Insurer-Government Risk Sharing Models

Thesis Abstract

This study addresses the persistent misalignment between insurer solvency objectives and governmental risk mitigation obligations in the context of systemic shocks, by developing a resilience-based framework for insurer-government risk sharing models that optimizes financial stability, public welfare, and moral hazard controls. The aim is to conceptualize and empirically test a robust, adaptive risk-sharing architecture that enhances resilience of both insurers and public sector balance sheets amid extreme hazard events, including natural catastrophes and pandemic shocks. Specific objectives are (i) to identify core resilience determinants in insurer-government risk transfer arrangements, (ii) to formulate a theoretical framework integrating resilience economics, cooperative risk-sharing, and catastrophe risk modeling, (iii) to operationalize a multilayered risk-sharing contract paradigm that aligns incentives and preserves solvency, (iv) to quantify the performance of the framework under varying hazard intensities and fiscal constraints, and (v) to provide policy and regulatory recommendations for implementing resilient arrangements. The research adopts a mixed-methods design with a dominant quantitative phase complemented by qualitative insights. The population comprises licensed re/insurers, government risk-bearing agencies, and supervisory authorities across five major jurisdictions with active public-private risk transfer practices. A purposive sample of 40 senior executives from insurers and 20 policy-area officials will be surveyed, supplemented by 15 in-depth interviews with regulators and 10 case-study entities that have implemented public-private risk-sharing arrangements. Data collection instruments include a standardized questionnaire to measure resilience factors, feasibility and cost metrics of risk-sharing contracts, and scenario-based modules to simulate shock events; semi-structured interview guides will gather governance, incentive, and regulatory perspectives. Validity and reliability will be ensured through triangulation, pilot testing of instruments (n=20), and Cronbach’s alpha testing for internal consistency. Quantitative analysis will employ multivariate regression to identify determinants of resilience-enhancing contract features, structural equation modeling to test the hypothesized relationships among resilience capabilities, risk transfer efficiency, and solvency indicators, and Monte Carlo simulations to evaluate performance under stochastic hazard processes. The analytical framework will incorporate two established theories the Risk-Sharing Theory of cooperative contracts and the Resilience Theory in socio-technical systems, enriched by a governance-incentives lens grounded in principal-agent theory. A conceptual model will be formalized to depict the interdependencies among hazard exposure, capital adequacy, premium pricing, government guarantees, and default risk. Anticipated findings include (i) quantifiable gains in solvency buffers and timely payout stability when resilience-enhancing contract features (e.g., contingent government subsidies, catastrophe reserves, and dynamic risk-adjusted pricing) are adopted, (ii) improved alignment of insurer and government incentives reducing moral hazard and under-provision of capital, and (iii) evidence that regulatory certainty and transparent governance mechanisms amplify resilience outcomes. The study contributes to knowledge by operationalizing a novel resilience-based risk-sharing paradigm that merges theoretical constructs from resilience economics, cooperative game theory, and regulatory design with empirical validation across real-world settings, thereby bridging a gap between theoretical models and implementation realities. Policy implications include recommended design principles for public-private risk-sharing agreements, criteria for calibrating government guarantees, and a framework for ongoing monitoring and stress-testing. The conclusion will synthesize the conditions under which resilience-oriented risk sharing outperforms traditional arrangements, and recommendations will address scalability, governance, and capacity-building needs for regulators, insurers, and state risk agencies.