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on Insurance Economics |
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Issue of 2009‒05‒30
four papers chosen by Soumitra K Mallick Indian Institute of Social Welfare and Bussiness Management |
| By: | Renaud Bourlès (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales - CNRS : UMR6579, Université Toulouse 1 - Université Toulouse 1); Dominique Henriet (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales - CNRS : UMR6579) |
| Abstract: | The aim of this paper is to analyze the need for capital and default regulation in insurance. Proponents of deregulation argue that these requirements are useless as insurers would hold enough capital as soon as the insured are fully informed about their default probability. Adding to the purpose the relationship between an insurer and her security holders (that is the issuance and dividend policy) we show that the second best capital reserve decided by the security holders is suboptimal whenever the return on cash inside the firm is smaller than outside. Because of limited commitment on recapitalization, disclosure of information may not be enough. Given these characteristics, State commitment to recapitalize could be an alternative regulation policy. |
| Keywords: | insurance, capital reserve, regulation, recapitalization |
| Date: | 2009–05–21 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00386453_v1&r=ias |
| By: | TAMURA Sakuya; SAWADA Yasuyuki |
| Abstract: | We examine how households protected their livelihood against an unexpected negative shock caused by the highly pathogenic avian influenza (HPAI). We also compare HPAI with other shocks such as sickness, ceremonial events, typhoons, floods, droughts, and unemployment. We apply the augmented testing framework of the canonical consumption risk-sharing hypothesis developed by Fafchamps and Lund (2003) to our unique household panel data that was collected in two Vietnamese villages exclusively for this study. While we reject the full consumption risk-sharing hypothesis strongly, our empirical results reveal that informal credit transactions played an important role for those affected by HPAI in coping with the unforeseen negative asset shock that it created. Moreover, our result suggests that the informal and/or formal insurance network against an unforeseen event has been strengthened after awhile. |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:09023&r=ias |
| By: | Ferro, Gustavo |
| Abstract: | Longevity is increasing in the whole world, and savings for retirement are growing quickly. There is a potential demand for certainty in the income streams for pensioners since old-fashioned pay-as-you-go systems became financially stressed. A financial product, the annuity contract, offers longevity insurance but the demand is scarce for various reasons, and the supply is reluctant because the rapid improvements in longevity threaten the profitability of the business. The instrument and its market is analyzed conceptually and empirically by means of an examination of the literature, and a discussion is made in order to ameliorate the understanding of an apparent paradox: why an interesting instrument is not more spread. |
| Keywords: | annuity; insurance; pension |
| JEL: | G22 G23 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:15436&r=ias |
| By: | Mas, Nuria (IESE Business School) |
| Abstract: | The United States relies on charitable medical care to serve the uninsured, most of which is offered by hospitals that act as providers of last resort and that constitute the safety net. This paper analyzes the effect that hospital financial stress has on the health of the uninsured. In particular we look at managed care. Managed care penetration has often been blamed for increasing financial pressures on hospitals and previous work has shown that safety net hospitals have been affected more severely by it. Our findings are threefold: first, we find that managed care financial pressures encourage charity care patients to concentrate in public hospitals. Second, we find that these hospitals, in turn, see a decrease in their quality of care in areas where managed care penetration is stronger. Finally, we also find that managed care diffusion has a negative effect on the quality of care received by the uninsured - as measured by the probability of dying after a heart attack - and of those that go to government hospitals. |
| Keywords: | uninsured; hospitals; financial care; quality; |
| Date: | 2009–03–19 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:iesewp:d-0789&r=ias |