The Hedging Strategies of Optimization in Insurance Payment Processes

In this paper we discuss the insurance companies with payment process A_t hedge their risk to the level of minimax by buying stocks S_t, exchanging foreign -- currency Q_t and buying risk -- free asset B_t in the financial market (S_t,Q_t,B_t). In virtue of Galtchouk-Kunita-Watanabe Decomposition Theorem, the expression of risk is expressed over again. Then we get the hedging strategies of optimization with minimal risk. It gives out a realistic example to apply the important conclusion in this paper, which makes this paper to be more practical.