nep-ias New Economics Papers
on Insurance Economics
Issue of 2013‒08‒05
seven papers chosen by
Soumitra K Mallick
Indian Institute of Social Welfare and Business Management

  1. Protecting the poor : a microinsurance compendium: volume II By Churchill, Craig; Matul, Michal
  2. Insurance Approach for Financing Extreme Climate Event Losses in China: A Status Analysis By Haitao Yin
  3. Heterogeneity of the effects of health insurance on household savings: Evidence from rural China By Diana Cheung; Ysaline Padieu
  4. Whither Dairy Policy? Evaluating Expected Government Outlays and Distributional Impacts of Alternative 2013 Farm Bill Dairy Title Proposals By Newton, John; Thraen, Cameron S.; Bozic, Marin
  5. Two-Period Comparison of Healthcare Demand with Income Growth and Population Aging in Rural China: Implications for Adjustment of the Healthcare Supply and Development By Martine Audibert; Yong He; Jacky Mathonnat

  1. By: Churchill, Craig; Matul, Michal
    Keywords: microinsurance, low income, household income, social protection, insurance, health insurance, life insurance, microassurance, faible revenu, revenu des ménages, protection sociale, assurances, assurance-maladie, assurance-vie, microseguro, bajos ingresos, ingreso de los hogares, protección social, seguros, seguro de enfermedad, seguro de vida
    Date: 2012
  2. By: Haitao Yin (AnTai College of Economics and Management, Shanghai Jiao Tong University)
    Abstract: China suffers a variety of natural disasters every year. The frequency and consequences of these disasters have risen due to climate change, resulting in increased economic losses. This project first examines the existing public system of disaster relief and recovery including both direct government subsidy and public insurance system through extensive documentary study, focus group discussions and in-person interviews. We found that the usefulness of direct government subsidies is limited by the availability of public financial resources. Direct government subsidies are largely reserved for those who do not have the capability for self- relief and recovery. For those who do receive government subsidies, the amount of assistance is only sufficient for basic housing needs instead of restoring the way of life people had before a natural disaster. Public insurance, on the other hand, only applies to rural areas and has a maximum coverage of only about CNY 18,000. As with direct government subsidies, the purpose of public insurance is meeting basic needs, instead of helping people go back to the life they used to have. Furthermore, the premium of the public insurance system is heavily subsidized and not related to risk. This practice has been criticized for watering down economic incentives for proactive risk management and emergency response capacity building (Gurenko and Lester 2004; Heinz Center 2000; Yin, Kunreuther, and White 2011). The limitations of the public approach create a space for private insurance. In this paper, we investigate how China’s insurance industry (as suppliers) and Chinese people (as consumers) view natural disaster insurance. We conducted in-person interviews with insurance companies that are involved in the property insurance market in China. Insurance companies hesitate to offer insurance policy against natural disasters because of institutional barriers (e.g., natural disaster coverage is not considered a separate category, and existing accounting and tax regulations), low demand from consumers and the ambiguity associated with natural disaster. Our analysis of the demand for insurance is based on a field survey, which includes a choice- experiment of insurance selection. We found that people have a low demand for insurance because of three major reasons: a) the perception of “it won’t happen to me”, b) budgetary constraint, and c) a deep distrust in the insurance industry. We found that people tend to avoid insurance offered by small-scale insurance companies and strongly favor government insurance. This suggests that the establishment of natural disaster insurance should be initiated by government in China. We also found that one’s willingness to pay (WTP) for natural disaster insurance would significantly increase if one has high risk perception, and has experienced natural disasters. Our analyses suggest that neither the public nor private approach present an adequate solution to the challenge of financing natural disaster losses in China. Government-business collaboration may provide a viable alternative. Based on our findings, we discuss the roles that government and the private sector should play in a collaborative system.
    Keywords: climate change, China
    Date: 2013–03
  3. By: Diana Cheung (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne); Ysaline Padieu (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)
    Abstract: This paper estimates the impact of the New Cooperative Medical Scheme (NCMS) on household saving across income quartiles in rural China. We use data from the China Health and Nutrition Survey for the 2006 wave and we run an ordinary least squares regression. We control for the endogeneity of NCMS participation by using an instrumental variable strategy. We find evidence that NCMS has a negative impact on savings of lower-middle-income participants, while it does not affect the poorest households. The negative effect of NCMS on savings of middle-income participants holds when we use propensity score matching estimations as a robustness check.
    Keywords: Rural China; New Cooperative Medical Scheme; health insurance; Chinese savings and consumption; propensity score matching
    Date: 2013–07
  4. By: Newton, John; Thraen, Cameron S.; Bozic, Marin
    Abstract: In this analysis we compare the total expected government outlays and distribution of benefits under newly proposed dairy margin insurance programs to those under existing counter-cyclical payment programs. We combine simulation and structural modeling techniques to forecast milk price and dairy income-over-feed-cost margins. Using the price forecasts we employ Monte-Carlo experiments to evaluate the total expected government outlays for a sample of 5000 representative farms given a constant relative risk aversion utility framework. We find that expected outlays favor large farm operations and are an order of magnitude higher than those under existing programs. Under the current policy framework (MILC), farms with less than 100 cows (76% of farms) account for 42% of net payments and farms over 1000 cows (2% of farms) account for 6% of net payments. Under the new policy regime farms with fewer than 100 cows will get 17-21% of net program benefits, and farms over 1000 cows will get 36-43% of benefits.
    Keywords: dairy, margin insurance, farm bill, supply-management, dairy security act, dairy freedom act, Gini coefficient, farm payments, Agribusiness, Agricultural and Food Policy, Demand and Price Analysis, Farm Management, Livestock Production/Industries, Risk and Uncertainty,
    Date: 2013
  5. By: Martine Audibert (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Yong He (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Jacky Mathonnat (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: We estimate the evolution of healthcare demand under the influence of income growth and population aging with two samples of patients surveyed in the same regions, but with an interval of 18 years in rural China and with mixed logit to deal with heterogeneity. In accordance with theoretical and inductive inferences, it is found that healthcare price effects decreased and became more heterogeneous. Aging impact overweighed income growth impact, resulting in increasing distance effect and patients' preference to proximity. In the face of this demand change, the adjustment of governmental supply should be to promote small and middle-sized healthcare providers. However during this period to cope with urbanization, the Chinese policy consisted of privileging large hospitals. This has led to a higher share of patients, especially the aging patients, to choose self-care and a higher share of poorer patients to suffer from catastrophic health expenditures. This finding carries broad implications for rural health policy-making on, along with income growth, population aging and urbanization, how to provide better coverage of rural areas by enough qualified and multifunctional small and middle-sized healthcare providers in the developing world.
    Keywords: Two-period healthcare demand comparison;mixed logit model;price and distance effects;heterogeneity;insurance;rural China
    Date: 2013–07–18
  6. By: Argesanu, Nicolae Razvan
    Abstract: Through this article has attempted to submit the main policy measures aiming to ensure the sustainability of pension systems in the EU Member States taking into account disequilibriums that accumulate between the allocation resources between different generations and within the same generation. Although national pension systems have a wide range of composition and structure of pension funds, public and private, most largely depended on the social model, the history and extent of state involvement to ensure development in this area, due to the reorientation of European Union level of the policy of pensions insurance towards "adequacy, sustainability and safety" it develop a convergence in their forms reformed systems in which public pension complementarity with other categories of income - the private pension and / or active aging - remain a constant, a fundamental restriction.
    Keywords: redistribution, insurance, savings, sustainability, adequacy, convergence
    JEL: G38 I38 J48
    Date: 2013–06–20
  7. By: Argesanu, Nicolae Razvan
    Abstract: This article aims to ofer a new framework for social protection approach starting from identifying common ground, or at least a certain degree of convergence of different approaches from the literature on the area of manifestation, objectives and social protection configuration and highlighting subsequently impact on the economy policies in this area, and society in general. We see that more attention should be paid to aspects of integrative / correlative coherence of social protection policies that would allow better efficiency and rationalization of social costs in general and, in particular, those that have direct impact on public finances.
    Keywords: social protection system, social insurance, safety nets, social inclusion
    JEL: G38 I00 I31 I38 J68
    Date: 2013–05

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