Selling insurance gives insurers an incentive to manage insured risks. The “insurance as governance” literature demonstrates that insurers often make insurance conditional on ex ante risk reduction or mitigation. But insurance governs in support of enterprise, not security for its own sake. Tight underwriting inhibits enterprise – not only for insured businesses but also the business of insurance. Anja Shortland discusses how insurers have addressed the evolving problems of moral hazard, uncertainty, and correlated losses since the 1990s.

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