So bland is the insurance business perceived to be, that it’s the stuff of Hollywood comedy. In the 2004 film Along Came Polly, Ben Stiller played a skittish, risk averse insurance adjuster with actuarial data on bathroom hygiene at his fingertips (no pun). Woody Allen famously depicts his hapless criminal Virgil Starkwell locked in solitary confinement with an eager insurance salesman in the 1969 mocumentary Take the Money and Run. Cruel and unusual punishment, indeed. Boring though they may be, insurance markets are incredibly important in helping society manage risks of all sorts. Insurance markets also have a funny way of shaping behavior – both personal and commercial – in ways that serve the public interest. Take the response to Hurricane Sandy as just one example. Law makers in Washington D.C. may never agree on whether that storm was a product of a warming climate. In fact, they may debate the […]