Chapter 1
Introduction
1.1 Overview
Insurance industry is one of the earliest industries that has been essentially relying on
statistical mechanisms to harvest profit. The fundamental rules of statistics, such as
the Law of Large Numbers, built the foundation for the industry’s economics. In this
research, we also utilize statistics to study the impact of insurance regulation, which
has shaped the industry’s competitive landscape and its practices since the inception
of this industry.
Regulation has a long history in the insurance industry, and it reflects the ever-
lasting government role in ensuring the integrity of the practitioners and protecting
customers. Almost all the major changes in this industry were accompanied by the
passage of major regulations. For instance, the Sherman Antitrust Act in 1890 put all