{"id":{"repo_id":"uiuc","oai_identifier":"oai:www.ideals.illinois.edu:2142/129267"},"canonical_url":"https://search.dev.ndltd.org/etd/uiuc/oai:www.ideals.illinois.edu:2142/129267","repository":{"repo_id":"uiuc","name":"University of Illinois - Urbana-Champaign","base_url":"https://www.ideals.illinois.edu/oai-pmh"},"display":{"title":"Risk and premium allocation in decentralized finance insurance","abstract":"Submission original under an indefinite embargo labeled 'Open Access'. The submission was exported from vireo on 2025-10-19 without embargo terms","abstract_html":"Submission original under an indefinite embargo labeled 'Open Access'. The submission was exported from vireo on 2025-10-19 without embargo terms","abstract_has_math":false,"creators":["Yang, Jiajie"],"institution":"University of Illinois Urbana-Champaign","degree_name":"Ph.D.","degree_level":"Dissertation","degree_discipline":"Mathematics","degree_department":null,"school":null,"contributors":["Wei, Wei","Feng, Runhuan","Quan, Zhiyu","Jing, Xiaochen"],"advisors":[],"committee_chairs":[],"committee_members":[],"year":2025,"date_issued":"2025-04-29","date_published":"2025-04-29","updated_at":"2026-07-22T22:25:04Z","subjects":["Decentralized insurance","Peer-to-peer insurance","Distributed insurance","Risk allocation","Capital allocation."],"languages":["en","eng"],"rights":["Copyright 2025 Jiajie Yang"],"rights_urls":[],"identifier_entries":[]},"links":{"outbound_url":"https://hdl.handle.net/2142/129267","outbound_label":"Handle","outbound_source":"dc:identifier"},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:contributor","label":"Contributor","values":["Wei, Wei","Feng, Runhuan","Quan, Zhiyu","Jing, Xiaochen"]},{"key":"dc:creator","label":"Author","values":["Yang, Jiajie"]}]},{"id":"academic_context","label":"Academic Context","entries":[{"key":"dc:date","label":"Dc Date","values":["2025-04-29","2025-05"]},{"key":"dc:type","label":"Dc Type","values":["text","Thesis"]},{"key":"thesis:degree_discipline","label":"Discipline","values":["Mathematics"]},{"key":"thesis:degree_level","label":"Degree Level","values":["Dissertation"]},{"key":"thesis:degree_name","label":"Degree Name","values":["Ph.D."]},{"key":"thesis:institution_name","label":"Thesis Institution Name","values":["University of Illinois Urbana-Champaign"]}]},{"id":"subjects_keywords","label":"Subjects and Keywords","entries":[{"key":"dc:subject","label":"Dc Subject","values":["Decentralized insurance","Peer-to-peer insurance","Distributed insurance","Risk allocation","Capital allocation."]}]},{"id":"language_rights","label":"Language and Rights","entries":[{"key":"dc:language","label":"Dc Language","values":["en","eng"]},{"key":"dc:rights","label":"Dc Rights","values":["Copyright 2025 Jiajie Yang"]}]},{"id":"identifiers","label":"Identifiers","entries":[{"key":"dc:identifier","label":"Identifier","values":["https://hdl.handle.net/2142/129267"]}]},{"id":"additional","label":"Additional Metadata","entries":[{"key":"dc:description","label":"Description","values":["Submission original under an indefinite embargo labeled 'Open Access'. The submission was exported from vireo on 2025-10-19 without embargo terms","The student, Jiajie Yang, accepted the attached license on 2025-04-28 at 17:27.","The student, Jiajie Yang, submitted this Dissertation for approval on 2025-04-28 at 17:35.","This Dissertation was approved for publication on 2025-04-29 at 15:57.","DSpace SAF Submission Ingestion Package generated from Vireo submission #22051 on 2025-10-19 at 18:11:08","In this thesis, we mainly consider two practical models in decentralized finance insurance. In the first part, we will consider the risk allocation in peer-to-peer insurance. Using the criterion of minimizing total variance, we propose an optimal risk-sharing framework and demonstrate that the linear risk-sharing strategy should be applied to the residual risks rather than the original risks, which is contrary to common practice in the literature. This approach provides better variance reduction and stronger robustness. We further extend the model by introducing constraints that capture desirable principles such as fairness and participation incentivization. In the second part, we will consider the risk and premium allocation in distributed insurance. Unlike peer-to-peer insurance, distributed insurance enables individual investors to serve as insurers by sharing both risk and premium. We introduce a flexible loss allocation that generalizes the model that is currently being used in practice. It also unifies the existing allocation methods in traditional insurance, including proportional allocation and tranche insurance. This flexibility provides investors with multiple investment options, which increases market accessibility. We then design a premium allocation that incorporate the investment incentivization. The investors can be demonstrated to have better investment performance when investing more capital. Additionally, we develop a multi-period model in distributed insurance, which addresses the problem of lacking this model in practice. This model accounts for claim development and multi-period investment durations. We show that this system not only maintains fairness but also encourages longer-term investment, which aligns with the practical needs of a growing distributed insurance market."]},{"key":"dc:format","label":"Dc Format","values":["application/pdf"]},{"key":"dc:title","label":"Title","values":["Risk and premium allocation in decentralized finance insurance"]}]}],"canonical_facts":{"dc:contributor":["Wei, Wei","Feng, Runhuan","Quan, Zhiyu","Jing, Xiaochen"],"dc:creator":["Yang, Jiajie"],"dc:date":["2025-04-29","2025-05"],"dc:description":["Submission original under an indefinite embargo labeled 'Open Access'. The submission was exported from vireo on 2025-10-19 without embargo terms","The student, Jiajie Yang, accepted the attached license on 2025-04-28 at 17:27.","The student, Jiajie Yang, submitted this Dissertation for approval on 2025-04-28 at 17:35.","This Dissertation was approved for publication on 2025-04-29 at 15:57.","DSpace SAF Submission Ingestion Package generated from Vireo submission #22051 on 2025-10-19 at 18:11:08","In this thesis, we mainly consider two practical models in decentralized finance insurance. In the first part, we will consider the risk allocation in peer-to-peer insurance. Using the criterion of minimizing total variance, we propose an optimal risk-sharing framework and demonstrate that the linear risk-sharing strategy should be applied to the residual risks rather than the original risks, which is contrary to common practice in the literature. This approach provides better variance reduction and stronger robustness. We further extend the model by introducing constraints that capture desirable principles such as fairness and participation incentivization. In the second part, we will consider the risk and premium allocation in distributed insurance. Unlike peer-to-peer insurance, distributed insurance enables individual investors to serve as insurers by sharing both risk and premium. We introduce a flexible loss allocation that generalizes the model that is currently being used in practice. It also unifies the existing allocation methods in traditional insurance, including proportional allocation and tranche insurance. This flexibility provides investors with multiple investment options, which increases market accessibility. We then design a premium allocation that incorporate the investment incentivization. The investors can be demonstrated to have better investment performance when investing more capital. Additionally, we develop a multi-period model in distributed insurance, which addresses the problem of lacking this model in practice. This model accounts for claim development and multi-period investment durations. We show that this system not only maintains fairness but also encourages longer-term investment, which aligns with the practical needs of a growing distributed insurance market."],"dc:format":["application/pdf"],"dc:identifier":["https://hdl.handle.net/2142/129267"],"dc:language":["en","eng"],"dc:rights":["Copyright 2025 Jiajie Yang"],"dc:subject":["Decentralized insurance","Peer-to-peer insurance","Distributed insurance","Risk allocation","Capital allocation."],"dc:title":["Risk and premium allocation in decentralized finance insurance"],"dc:type":["text","Thesis"],"thesis:degree_discipline":["Mathematics"],"thesis:degree_level":["Dissertation"],"thesis:degree_name":["Ph.D."],"thesis:institution_name":["University of Illinois Urbana-Champaign"]},"updated_at":"2026-07-22T22:25:04Z"}