This is a simulation of an insurance market where the premium moves according to the balance between supply and demand. In this model, insurers set their supply with the aim of maximising their expected utility gain while operating under imperfect information about both customer demand and underlying risk distributions.

There are seven types of insurer strategies. One type follows a rational strategy within the bounds of imperfect information. The other six types also seek to maximise their utility gain, but base their market expectations on a chartist strategy. Under this strategy, market premium is extrapolated from trends based on past insurance prices. This is subdivided according to whether the insurer is trend following or a contrarian (counter-trend), and further depending on whether the trend is estimated from short-term, medium-term, or long-term data.

Customers are modelled as a whole and allocated between insurers according to available supply. Customer demand is calculated according to a logit choice model based on the expected utility gain of purchasing insurance for an average customer versus the expected utility gain of non-purchase.

This is an agent-based model of a simple insurance market with two types of agents: customers and insurers. Insurers set premium quotes for each customer according to an estimation of their underlying risk based on past claims data. Customers either renew existing contracts or else select the cheapest quote from a subset of insurers. Insurers then estimate their resulting capital requirement based on a 99.5% VaR of their aggregate loss distributions. These estimates demonstrate an under-estimation bias due to the winner’s curse effect.

An ABM, derived from a case study and a series of surveys with greenhouse growers in the Westland, Netherlands. Experiments using this model showshow that the greenhouse horticulture industry displays diversity, adaptive complexity and an uneven distribution, which all suggest that the industry is an evolving system.