nep-ias New Economics Papers
on Insurance Economics
Issue of 2009‒10‒24
six papers chosen by
Soumitra K Mallick
Indian Institute of Social Welfare and Bussiness Management

  1. Regulating Private Health Insurance in France : New Challenges for Employer-Based Complementary Health Insurance. By Monique Kerleau; Anne Fretel; Isabelle Hirtzlin
  2. Assessing the success of microinsurance programmes in meeting the insurance needs of the poor By Paul Mosley
  3. Work councils and separations: voice, monopoly, and insurance effects By Hirsch, Boris; Schank, Thorsten; Schnabel, Claus
  4. "Banks Running Wild--The Subversion of Insurance by "Life Settlements" and Credit Default Swaps" By Marshall Auerback; L. Randall Wray
  5. Assessing the insurance role of microsavings By David Hulme; Karen Moore; Armando Barrientos
  6. Savings, Credit, and Insurance: Household Demand for Formal Financial Services in Rural Ghana By Mirko Bendig; Lena Giesbert; Susan Steiner

  1. By: Monique Kerleau (Centre d'Economie de la Sorbonne); Anne Fretel (Centre d'Economie de la Sorbonne); Isabelle Hirtzlin (Centre d'Economie de la Sorbonne)
    Abstract: In France, people obtain basic health insurance coverage through a public health insurance system. Although public coverage is comprehensive, substantial co-payments and deductibles are more and more required and individuals become increasingly dependant on private complementary health insurance, to be better reimbursed. In the context of strengthened constraints to control public health spending, the market for complementary cover is indeed likely to develop. This expansion has several implications for the regulation of private health insurance. Starting in the early 2000s, public policies have emphasized tools that directly motivate employers to provide group-insurance schemes. These include subsidies to employers for offering complulsory, supplementary coverage, and mandating social partners to negociate the implementation of health coverage in every compagny, whatever its size or activity. Such changes tend, to some extent, to "re-couple" health insurance with companies. This paper explores the implications of this experience for France.
    Keywords: Private health care insurance, complementary employer-provided health insurance.
    JEL: I18 G22 G28 J33
    Date: 2009–09
  2. By: Paul Mosley
    Abstract: The paper reviews attempts to provide insurance against risks afflicting the poorest. It presents empirical evidence on the impact of different types of microinsurance, and recommends the idea of ‘quasi-insurance’—the provision of insurance functions through a non-insurance route—where institutional or regulatory constraints prevent insurance proper from being offered. The paper argues that microinsurance so far has been somewhat supply-driven rather than driven by effective demand, especially from the poorest, and thus the insurance products which would benefit the poorest are still at a limited stage of development. Institutional innovations and new insurance products therefore deserve promotion.
    Keywords: microinsurance, microcredit, microsavings, microfinance, risk, insecurity, poverty
    JEL: G21 G22 O16 O17
    Date: 2009–10
  3. By: Hirsch, Boris; Schank, Thorsten; Schnabel, Claus
    Abstract: Using a large linked employer-employee data set for Germany, we find that the existence of a works council is associated with a lower separation rate to employment, in particular for men and workers with low tenure. While works council monopoly effects show up in all specifications, clear voice effects are only visible for low tenured workers. Works councils also reduce separations to non-employment, and this impact is more pronounced for men. Insurance effects only show up for workers with tenure of more than one year. Our results indicate that works councils primarily represent the interests of a specific clientele. ; Unter Verwendung eines großen kombinierten Firmen-Beschäftigten-Datensatzes für Deutschland finden wir, dass die Existenz eines Betriebsrates mit einer geringeren Abgangsrate in (anderweitige) Beschäftigung einhergeht, dies insbesondere bei männlichen Arbeitnehmern und solchen mit geringen Betriebszugehörigkeitsdauern. Während es anzeichen für Monopoleeffekte eines Betriebsrates in allen empirischen Spezifikationen gibt, sind eindeutige Voiceeffekte lediglich für Beschäftige mit geringen Betriebszugehörigkeitsdauern erkennbar. Ein weiteres Ergebnis ist, dass bei Vorhandensein eines Betriebsrates auch die Abgangsrate in Nichtbeschäftigung abnimmt, wobei dieser Effekt abermals bei männlichen Beschäftigten ausgeprägter ist. Diese Versicherungseffekte eines Betriebsrates treten jedoch nur für Arbeitnehmer mit Betriebszugehörigkeitsdauern von über einem Jahr auf. Unsere Ergebnisse deuten darauf hin, dass Betriebsräte in erster Linie die Interessen einer spezifischen Klientel vertreten.
    Keywords: works council,separations,collective voice,duration models,Germany
    JEL: J53 J63
    Date: 2009
  4. By: Marshall Auerback; L. Randall Wray
    Abstract: Oblivious to any lessons that might have been learned from the global financial mess it has created, Wall Street is looking for the next asset bubble. Perhaps in the market for death it has found a replacement for the collapsed markets in subprime mortgage–backed securities and credit default swaps (CDSs). Instead of making bets on the "death" of securities, this new product will allow investors to gamble on the death of human beings by purchasing "life settlements"--life insurance policies that the ill and elderly sell for cash. These policies will then be packaged together as bonds—securitized—and resold to investors, who will receive payouts when the people with the insurance die. In effect, just as the sale of a CDS creates a vested interest in financial calamity, here the act of securitizing life insurance policies creates huge financial incentives in favor of personal calamity. The authors of this Policy Note argue that this is a subversion--or an inversion--of insurance, and it raises important public policy issues: Should we allow the marketing of an instrument in which holders have a financial stake in death? More generally, should we allow the "innovation" of products that condone speculation under the guise of providing insurance?
    Date: 2009–10
  5. By: David Hulme; Karen Moore; Armando Barrientos
    Abstract: The paper contends that more attention should be paid to micro savings in view of multiple ways in which it can help poor to deal with economic insecurity. The paper presents information to show that while microsaving programs have spread, their full potential is far from being realized. It presents a detailed analysis on the basis of data from a selection of micro savings programs to show how savings help the poor to smooth consumption and undertake investment. The paper urges for a strong campaign to popularise micro saving programs.
    Keywords: Economic insecurity, Micro credit, Micro insurance, Micro savings, Micro finance institutions, Poverty
    JEL: G21 O16 O17
    Date: 2009–10
  6. By: Mirko Bendig; Lena Giesbert; Susan Steiner
    Abstract: This paper argues that the study of the demand for financial services in developing countries leaves out part of the story if it looks at only one of the three elements of the so-called finance trinity—that is, savings products, loans and insurance—as is largely done in the literature. In contrast to previous research, this study assumes that households’ choices for any of these services are strongly interconnected. Therefore, the paper simultaneously estimates the determinants of household demand for savings, loans and insurance by applying a multivariate probit model to household survey data from rural Ghana. On the one hand, the estimation results confirm the common finding that poorer households are less likely to participate in the formal financial sector than better-off households. On the other hand, there is empirical evidence that the use of savings products, loans and insurance depends not only on the socioeconomic status of households, but also on various other factors, such as households’ risk assessment and past exposure to shocks. In addition, trust in the providing institution and its products appear to play a key role.
    Date: 2009

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