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We consider a discrete-time version of the popular optimal dividend pay-out problem in risk theory. The novel aspect of our approach is that we allow for a risk averse insurer, i.e., instead of maximising the expected discounted dividends…

Probability · Mathematics 2015-12-02 Nicole Bäuerle , Anna Jaśkiewicz

Adopting a probabilistic approach we determine the optimal dividend payout policy of a firm whose surplus process follows a controlled arithmetic Brownian motion and whose cash-flows are discounted at a stochastic dynamic rate. Dividends…

Optimization and Control · Mathematics 2021-06-22 Elena Bandini , Tiziano De Angelis , Giorgio Ferrari , Fausto Gozzi

This paper considers the optimal dividend payment problem in piecewise-deterministic compound Poisson risk models. The objective is to maximize the expected discounted dividend payout up to the time of ruin. We provide a comparative study…

Optimization and Control · Mathematics 2016-08-02 Runhuan Feng , Hans Volkmer , Shuaiqi Zhang , Chao Zhu

We propose a model in which dividend payments occur at regular, deterministic intervals in an otherwise continuous model. This contrasts traditional models where either the payment of continuous dividends is controlled or the dynamics are…

Optimization and Control · Mathematics 2019-07-24 Jussi Keppo , Max Reppen , H. Mete Soner

This paper concerns an optimal dividend distribution problem for an insurance company with surplus-dependent premium. In the absence of dividend payments, such a risk process is a particular case of so-called piecewise deterministic Markov…

Portfolio Management · Quantitative Finance 2016-04-26 Ewa Marciniak , Zbigniew Palmowski

We consider an insurance company modelling its surplus process by a Brownian motion with drift. Our target is to maximise the expected exponential utility of discounted dividend payments, given that the dividend rates are bounded by some…

Risk Management · Quantitative Finance 2019-01-23 Julia Eisenberg , Paul Krühner

Based on a point of view that solvency and security are first, this paper considers regular-singular stochastic optimal control problem of a large insurance company facing positive transaction cost asked by reinsurer under solvency…

Risk Management · Quantitative Finance 2010-12-22 Zongxia Liang , Jicheng Yao

In this paper, we study the optimal dividend problem under the continuous time diffusion model with the bounded dividend rate from the Reinforcement Learning (RL) perspective. Unlike the standard literature, our main focus will be on…

Optimization and Control · Mathematics 2026-03-30 Lihua Bai , Thejani Gamage , Jin Ma , Gaozhan Wang

We re-visit the classical problem of optimal payment of dividends and determine the degree to which the diffusion approximation serves as a valid approximation of the classical risk model for this problem. Our results parallel some of those…

Optimization and Control · Mathematics 2020-10-26 Asaf Cohen , Virginia R. Young

We reconsider the study of optimal dividend strategies in the Cram\'er-Lundberg risk model. It is well-known that the solution of the classical dividend problem is in general a band strategy. However, the numerical techniques for the…

Optimization and Control · Mathematics 2022-07-05 Hansjörg Albrecher , Brandon García Flores

This paper studies the dividend and capital injection problem under a diffusion risk model with general discount functions. A proportional cost is imposed when injecting capitals. For exponential discounting as time-consistent benchmark, we…

Mathematical Finance · Quantitative Finance 2025-05-30 Sang Hu , Zihan Zhou

We study the problem of optimal risk policies and dividend strategies for an insurance company operating under the constraint that the timing of shareholder payouts is governed by the arrival times of a Poisson process. Concurrently, risk…

Optimization and Control · Mathematics 2025-02-19 Mark Kelbert , Harold A. Moreno-Franco

The dual risk model is a popular model in finance and insurance, which is often used to model the wealth process of a venture capital or high tech company. Optimal dividends have been extensively studied in the literature for a dual risk…

Risk Management · Quantitative Finance 2022-12-08 Arash Fahim , Lingjiong Zhu

This paper studies a dynamic optimal reinsurance and dividend-payout problem for an insurance company in a finite time horizon. The goal of the company is to maximize the expected cumulative discounted dividend payouts until bankruptcy or…

Mathematical Finance · Quantitative Finance 2022-06-28 Chonghu Guan , Zuo Quan Xu , Rui Zhou

This paper considers an optimal dividend distribution problem for an insurance company where the dividends are paid in a foreign currency. In the absence of dividend payments, our risk process follows a spectrally negative L\'evy process.…

Mathematical Finance · Quantitative Finance 2020-01-14 Julia Eisenberg , Zbigniew Palmowski

We study an optimal dividend problem under a bankruptcy constraint. Firms face a trade-off between potential bankruptcy and extraction of profits. In contrast to previous works, general cash flow drifts, including Ornstein--Uhlenbeck and…

Optimization and Control · Mathematics 2018-03-05 Max Reppen , Jean-Charles Rochet , H. Mete Soner

This paper considers nonlinear regular-singular stochastic optimal control of large insurance company. The company controls the reinsurance rate and dividend payout process to maximize the expected present value of the dividend pay-outs…

Risk Management · Quantitative Finance 2010-08-31 Zongxia Liang , Jicheng Yao

We study an optimal dividend problem for an insurer who simultaneously controls investment weights in a financial market, liability ratio in the insurance business, and dividend payout rate. The insurer seeks an optimal strategy to maximize…

Mathematical Finance · Quantitative Finance 2021-05-27 Zhuo Jin , Zuo Quan Xu , Bin Zou

In this paper we consider the optimal dividend problem for an insurance company whose risk process evolves as a spectrally negative L\'{e}vy process in the absence of dividend payments. The classical dividend problem for an insurance…

Probability · Mathematics 2008-12-10 Florin Avram , Zbigniew Palmowski , Martijn R. Pistorius

In this paper we study the optimal dividend problem for a company whose surplus process evolves as a spectrally positive Levy process. This model including the dual model of the classical risk model and the dual model with diffusion as…

Portfolio Management · Quantitative Finance 2014-03-11 Chuancun Yin , Yuzhen Wen , Yongxia Zhao
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