The Ruin Problem in Multiple Line Insurance A Simplified Model**

Abstract

Most of the insurance oriented literature contains several levels of abstraction regarding the financial solvency of insurance companies. The first level represents those advances in the actuarial profession which are destined to eventually solve the double problem of capacity and capitalization (hereinafter referred to as the Ruin Problem). Most of these works, however, are concerned with developing the tools necessary to determine the theoretical loss distribution in insurance. The emphasis, then, is upon the mean and variance of the total loss distribution as they can be derived from the distribution of frequency and severity.