Set of theoretical conditions defining the characteristics a risk must possess to be insurable by the private market, formalized by Baruch Berliner in 1982.
The Berliner criteria are a foundational normative framework in insurance theory, formulated by Baruch Berliner in his work Limits of Insurability of Risks (Prentice Hall, 1982). Berliner identifies nine necessary conditions, groupable into three dimensions. The actuarial dimension requires that losses occur randomly and independently (enabling pooling), that average frequency and severity are estimable from sufficient historical data, that the maximum potential loss remains bounded and financeable by the insurer's own funds, and that the required premium is economically viable. The behavioral dimension requires that moral hazard be manageable (the insured should not be able to influence loss probability undetected) and that adverse selection remain controllable. The social and regulatory dimension requires the absence of legal or public policy restrictions on underwriting and compliance with market constraints. These criteria are not binary but continuous: when a condition partially deteriorates, insurability does not disappear but translates into higher premiums, larger deductibles, sub-limits or exclusions. Physical climate risk and systemic cyber risk structurally compromise several of these criteria simultaneously, explaining observed market withdrawals.
Applied to accumulation cyber risk, the Berliner criteria reveal three simultaneous failures: independence of losses is compromised (near-perfect technological correlation in a CrowdStrike scenario), frequency estimability is compromised (insufficient and evolving data), and maximum loss remains difficult to bound (accumulation potential of 20 to 46 billion dollars at a bicentennial horizon per Munich Re). It is this convergence of failures that makes systemic underwriting non-viable for the private sector alone.
Berliner criteria, conditions d'assurabilité, limites de l'assurabilité