Neil A Doherty

Neil A Doherty
  • Fredrick H. Ecker Professor Emeritus of Insurance and Risk Management
  • Professor Emeritus of Business Economics and Public Policy

Contact Information

  • office Address:

    3000 Steinberg Hall-Dietrich Hall
    3620 Locust Walk
    Philadelphia, PA 19104

Research Interests: asset/liability management for insurers, financial intermediaries, insurance economics, insurance pricing, optimal insurance, risk management

Links: CV

Overview

Education

Fellowship of Chartered Insurance Institute, 1965

B.A. (Economics), University of York, 1968

B. Phil. (Economics), University of York, 1969

Ph.D., Cranfield Institute of Technology, 1979

Dr. Neil Doherty is the Frederick Ecker Professor Emeritus of Insurance and Risk Management at the Wharton School. He is associated with several of Wharton’s research centers, including the Risk Management and Decision Processes Center and the Financial Institutions Center. A member of the Wharton faculty since 1986, Neil has also consulted with organizations such as Amerco, Dow Chemical, Sears Roebuck, British Petroleum, Merck, GTE, CIGNA, Ace, Aon, Chubb and UPS.

Neil’s principal area of interest is in corporate risk management – focusing on the financial strategies for managing risks that traditionally have been insurable. Such strategies include the use of existing derivatives, the design of new financial products, and the use of capital structure. Neil has written several books in this area including, Corporate Risk Management: A Financial Exposition (1985) and The Financial Theory of Insurance Pricing (1987, with S. D’Arcy) and Integrated Risk Management (2000). A more recent book “The Known, the Unknown and the Unknowable” (2010), (edited jointly with Richard Herring and Frank Diebold) explores the issue in managing the vague and often un-measurable risks such as those that have recently plagued the global economy. He also has written several papers. Many of the ideas developed in his books (e.g., composites of insurance and debt financing and the use of option models in insurance and reinsurance) are now emerging in the marketplace. Neil is also the co-author of the economic textbook, Managerial Economics, 2005.

Two additional areas of focus include:

* the economics of risk and information – he has written several papers on the adverse selection, the value of information, and the design of insurance contracts with imperfect information.

* the failure of insurance markets and how they might be redesigned – in this area, he has written on cyclicality of markets, market crises, and the effect of catastrophes.

Neil coauthored several recent reports dealing with topical insurance issues. One of these The Economics of Insurance Intermediaries (2005) examined the underlying economics of insurance brokers in order to understand the issues raised by Elliot Spitzer’s investigations into this industry. Another TRIA and Beyond, (2005) looked at the market for terrorism insurance and examined the case for Federal Terrorism reinsurance. And a third “At War with the Weather: Managing Large Scale Risks in a New Era of Catastrophes” (with H. Kunreuther and others; 2009, MIT Press) – looks critically at the market for catastrophic risk. Neil is a graduate of the University of York and Cranfield Institute of Technology, where he received his doctorate in Economics.

Continue Reading

Research

Teaching

Past Courses

  • BEPP305 - RISK MANAGEMENT

    The last financial crisis and subsequent recession provide ample evidence that failure to properly manage risk can result in disaster. Individuals and firms confront risk in nearly all decisions they make. People face uncertainty in their choice of careers, spending and saving decisions, family choices and many other facets of life. Similarly, the value that firms create by designing and marketing good products is at risk from a variety of sources. The bankruptcy of a key supplier, sharp rise in cost of financing, destruction of an important asset, impact of global warming, or a liability suit can quickly squander the value created by firms. In extreme cases, risky outcomes can bankrupt a firm, as has happened recently to manufacturers of automobile parts and a variety of financial service firms. The events since the Global Financial Crisis also offer stark reminders that risk can impose significant6 costs on individuals, firms, governments, and society as a whole. This course explores how individuals and firms assess and evaluate risk, examines the tolls available to successfuly mange risk and discusses real-world phenomena that limit the desired amount of risk-sharing. Our focus is primarily on explaining the products and institutions that will serve you better when making decisions in your future careers and lives.

  • BEPP805 - RISK MANAGEMENT

    The last financial crisis and subsequent recession provide ample evidence that failure to properly manage risk can result in disaster. Individuals and firms confront risk in nearly all decisions they make. People face uncertainty in their choice of careers, spending and saving decisions, family choices, and many other facets of life. Similarly, the value that firms create by designing and marketing good products is at risk from a variety of sources. The bankruptcy of a key supplier, sharp rise in cost of financing, destruction of an important asset, impact of global warming, or a liability suit can quickly squander the value created by firms. In extreme cases, risky outcomes can bankrupt a firm, as has happened recently to manufacturers of automobile parts and a variety of financial service firms. The events since the Global Financial Crisis also offer stark reminders that risk can impose significant costs on individuals, firms, governments, and societ6y as a whole. This course explores how individuals and firms assess and evaluate risk, examines the tools available to successfully manage risk, and discusses real-world phenomena that limit the desired amount of risk-sharing. Our focus is primarily on explaining the products and institutions that will serve you better when making decisisions in your future careers and lives.

  • MGEC612 - MICROECON FOR MGR - ADV.

    This course will cover the economic foundations of business strategy and decision-making in market environments with other strategic actors and less than full information, as well as advanced pricing strategies. Topics include oligopoly models of market competition, creation, and protection, sophisticated pricing strategies for consumers with different valuations or consumers who buy multiple units (e.g. price discrimination, bundling, two-part tariffs), strategies for managing risk and making decisions under uncertainty, asymmetric information and its consequences for markets, and finally moral hazard and principle-agent theory with application to incentive contacts.

Awards and Honors

  • Miller-Sherrerd MBA Core Teaching Award, 2001
  • Miller-Sherrerd MBA Core Teaching Award, 1998
  • Undergraduate Excellence in Teaching Award, 1997

In the News

Activity

In the News

Micro Insurance: A Safety Net With Too Many Holes?

Unlike micro lending -- the better-known side of micro finance -- micro insurance has been a hard sell among the world's poor. The reasons why include a lack of understanding of how insurance products work, a general reticence on the part of poor populations to part with their meager financial resources, badly designed products and a shortage of localized risk management knowledge among providers. What needs to happen for micro insurance to prove that it can be both socially beneficial and economically viable?

Knowledge @ Wharton - 2009/09/30
All News

Awards and Honors

Miller-Sherrerd MBA Core Teaching Award 2001
All Awards