nep-ias New Economics Papers
on Insurance Economics
Issue of 2006‒12‒01
five papers chosen by
Soumitra K Mallick
Indian Institute of Social Welfare and Bussiness Management

  1. Leaving "Hotel California" : how incentives affect flows of benefit recipients in the Netherlands By Ours,Jan C. van
  2. Development under Regulation : The Way of the Ukrainian Insurance Market By Oleg Badunenko; Bogdana Grechanyuk; Oleksandr Talavera
  3. On the Optimal Design of Disaster Insurance in a Federation By Timothy J. Goodspeed; Andrew Haughwout
  4. Comparing Value-at-Risk Methodologies By Luiz Renato Regis de Oliveira Lima; Breno de Andrade Pinheiro Neri
  5. Intermunicipal Health Care Consortia in Brazil: Strategic Behavior, Incentives and Sustainability By Teixeira, Luciana; Bugarin, Mauricio S.; Dourado, Maria Cristina

  1. By: Ours,Jan C. van (Tilburg University, Center for Economic Research)
    Abstract: This paper discusses developments in the Netherlands concerning unemployment insurance, unemployment assistance and disability insurance. The emphasis is on how incentives for individual workers and firms affect flows of benefit recipients.
    Keywords: unemployment benefits;unemployment assistance;disability benefits;incentives
    JEL: H55 J64 J65
    Date: 2006
  2. By: Oleg Badunenko; Bogdana Grechanyuk; Oleksandr Talavera
    Abstract: This study is intended to assess the introduction of increased capitalization requirements for Ukrainian insurance firms. To do so, we employ up-to-date frontier efficiency analysis. The analysis suggests that an increase in size occurs not only because of the regulator's requirements, but also because all scale inefficient firms have been persistently operating under increasing returns to scale. Additionally, we show that the Ukrainian insurance industry experiences significant increases in technical efficiency. Our analysis identifies winners and losers among small, medium and large companies. The findings are consistent with the hypothesis that regulation forces firms to concentrate on efficiency.
    Keywords: insurance industry, efficiency and productivity analysis, returns to scale, bootstrap, Ukraine
    JEL: G22 G28 C15
    Date: 2006
  3. By: Timothy J. Goodspeed (Hunter College and Graduate Center of CUNY, Department of Economics, 695 Park Avenue, New York, NY 10021); Andrew Haughwout (Research and Statistics Group, Federal Reserve Bank of New York, 33 Liberty Street, New York, NY 10045)
    Abstract: Recent experience with disasters and terrorist attacks in the US indicates that state and local governments rely on the federal sector for support after disasters occur. But these same governments are responsible for investing in infrastructure designed to reduce vulnerability to natural and man-made hazards. This division of responsibilities – state governments providing protection from disasters and federal government providing insurance against their occurrence – leads to the tension that is at the heart of our analysis. We explore these tensions building on the model of Persson and Tabellini (1996). We show that when the federal government is committed to full insurance against disasters, states will have incentives to underinvest in costly protective measures. We then show that when the central government cannot verify state investment choices, the optimal insurance system would be designed to reward states that succeed in avoiding disasters and punish those that do not, thereby giving states an incentive to increase investment in protective infrastructure. However, this raises the question of whether the central government can credibly commit to such a scheme, and we find in a simple political model that it cannot. In our political model, the central government will decrease transfers ex-post if a state provides protective infrastructure that increases its expected uncertain income, generating a soft-budget constraint for states. This provides an additional incentive for states to underinvest in protective infrastructure. We discuss these results in light of disaster policy in the US.
    Date: 2006–11
  4. By: Luiz Renato Regis de Oliveira Lima (EPGE/FGV); Breno de Andrade Pinheiro Neri
    Date: 2006–11
  5. By: Teixeira, Luciana; Bugarin, Mauricio S.; Dourado, Maria Cristina
    Date: 2006–10

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