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on Insurance Economics |
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Issue of 2014‒04‒11
eleven papers chosen by Soumitra K Mallick Indian Institute of Social Welfare and Business Management |
| By: | Walter Nicholson; Karen Needels; Heinrich Hock |
| Keywords: | Unemployment Compensation, Unemployment Insurance, Great Recession, Federal Policy |
| JEL: | J |
| Date: | 2014–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:8080&r=ias |
| By: | Antoine Leblois (JRC, Ispra - Commission européenne); Philippe Quirion (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Centre de coopération internationale en recherche agronomique pour le développement [CIRAD] : UMR56 - CNRS : UMR8568 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - AgroParisTech); Benjamin Sultan (LOCEAN - Laboratoire d'Océanographie et du Climat : Expérimentations et Approches Numériques - Institut de recherche pour le développement [IRD] - INSU - CNRS : UMR7159 - Université Pierre et Marie Curie (UPMC) - Paris VI - Muséum National d'Histoire Naturelle (MNHN)) |
| Abstract: | In the Sudano-sahelian zone, which includes Northern Cameroon, the inter- annual variability of the rainy season is high and irrigation scarce. As a consequence, bad rainy seasons have a detrimental impact on crop yield. In this paper, we assess the risk mitigation capacity of weather index-based insurance for cotton farmers. We compare the ability of various indices, mainly based on daily rainfall, to increase the expected utility of a representative risk-averse farmer. We first give a tractable definition of basis risk and use it to show that weather index-based insurance is associated with a large basis risk, whatever the index considered. It has thus limited potential for income smoothing, a conclusion which is robust to the utility function. Second, in accordance with the existing agronomical literature we find that the length of the cotton growing cycle, in days, is the best performing index considered. Third, we show that using observed cotton sowing dates to define the length of the growing cycle significantly decreases the basis risk, compared to using simulated sowing dates. Finally we find that the gain of the weather-index based insurance is lower than that of hedging against cotton price fluctuations provided by the national cotton company. This casts doubt on the strategy of supporting weather-index insurances in cash crop sectors selling at international market prices without recommending any price stabilisation scheme. |
| Keywords: | Weather, index-based insurance, cash crop, price risk. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00967313&r=ias |
| By: | Silfverberg, Denise Valerie |
| Abstract: | The Individually Paying Program (IPP) is the voluntary component of the Philippines` social health insurance program. The program caters to those in the informal sector and those without a formal employer-employee relationship. Coverage levels for the IPP were found to be considerably low with a regional average of 57 percent and a provincial average of 53 percent. Massive variation between provinces was found. Four important factors were identified when looking into said variation. First, availability and accessibility is an issue. Second, substitution effect between private and public facilities was observed. Third, income levels do not appear to be a factor in determining the level of insurance coverage. Lastly, the size of certain sectors had a significant effect on the coverage levels observed in the province. Although there is a need to corroborate the findings with an individual-level analysis, these results are good indicators to start with in order to address the lack of coverage in the voluntary program of PhilHealth. |
| Keywords: | health care financing, Philippines, social health insurance, universal coverage, informal sector, voluntary program |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2014-15&r=ias |
| By: | Aase, Knut K. (Dept. of Business and Management Science, Norwegian School of Economics) |
| Abstract: | We analyze optimal consumption in the life cycle model by introducing life and pension insurance contracts. The model contains a credit market with biometric risk, and market risk via risky securities. This idealized framework enables us to clarify important aspects life insurance and pension contracts. We find optimal pension plans and life insurance contracts where the benefits are state dependent. We compare these solutions both to the ones of standard actuarial theory, and to policies offered in practice. Implications of this include what role the insurance industry may play to improve welfare. The relationship between substitution of consumption and risk aversion is highlighted in the presence of a consumption puzzle. One problem related portfolio choice is discussed - the horizon problem. Finally, we present some comments on longevity risk and cohort risk. |
| Keywords: | The life cycle model; pension insurance; optimal life insurance; longevity risk; the horizon problem; consumption puzzle |
| JEL: | D91 |
| Date: | 2014–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2014_013&r=ias |
| By: | Arthur Charpentier (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X, CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes 1 - Université de Caen Basse-Normandie); Benoît Le Maux (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes 1 - Université de Caen Basse-Normandie) |
| Abstract: | The present research relaxes three of the usual assumptions made in the insurance literature. It is assumed that (1) there is a finite number of risks, (2) the risks are not statistically independent and (3) the structure of the market is monopolistic. In this context, the article analyses two models of natural catastrophe insurance: a model of insurance with limited liability and a model with unlimited guarantee. Among others, the results confirm the idea that the natural catastrophe insurance industry is characterized by economies of scale. The government should consequently encourage the emergence of a monopoly and discipline the industry through regulated premiums. It is also shown that government intervention of last resort is not needed when the risks are highly correlated. Lastly, the results point out that when the risks between two regions are not sufficiently independent, the pooling of the risks can lead to a Pareto improvement only if the regions face similar magnitude of damage. If not, then the region with low-damage events needs the premium to decrease to accept the pooling of the risks. |
| Keywords: | Insurance, Ruin, Natural Catastrophe, Market Failure, Government Intervention |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00536925&r=ias |
| By: | Silfverberg, Denise Valerie |
| Abstract: | The Employed Program of the Philippine Health Insurance Corporation (PhilHealth) caters to those in the formal sector. Included are those in the government and private sectors with a formal employer-employee relationship. Coverage levels for both the government and private sectors are promising with regional averages of 74 percent and 71 percent, respectively; and provincial averages of 80 percent and 75 percent, respectively. For the private sector, certain sectors were found to be more prone to undercoverage. For the government sector, no clear pattern was found to explain the causes of variation between provinces. This is likely due to the absence of casual and contractual employees in the model. The findings for both sectors are possible propositions on how targeting should be implemented to address the gaps that exist in what is supposed to be a mandatory scheme. |
| Keywords: | health care financing, Philippines, social health insurance, universal coverage, formal sector, employed program |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2014-16&r=ias |
| By: | Yolanda F. Rebollo-Sanz (Department of Economics, Universidad Pablo de Olavide); Jose Ignacio García Pérez (Department of Economics, Universidad Pablo de Olavide) |
| Abstract: | Unemployment insurance is usually found to show negative effects in the transition from unemployment to a new job. However, the extent to which workers’ careers might improve or deteriorate as a result of the unemployment insurance system is not immediately clear. This paper addresses the effects of certain aspects of this system on employment stability by jointly accounting for benefits endogeneity, dynamic selection issues and occurrence dependence. The analysis is undertaken for a dual labour market, such as the market in Spain, where temporary and permanent workers differ with respect to numerous individual and labour market characteristics. We find that non-insured unemployed workers experience a greater rate of transition to employment than insured workers. But we also find that benefits encourage job stability for temporary workers not only by increasing subsequent job tenure but also by increasing the probability of entering into a permanent contract. Finally, we get that shortening the duration of the benefit entitlement period does not seem to lead to significant gains in overall employment stability, which increases at most by 4.3%. . |
| Keywords: | Unemployment insurance; Multivariate Mixed Proportional Hazard Model; Job Turnover; Employment Stability; Employment Dynamics |
| JEL: | J63 J64 J65 J68 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:pab:wpaper:14.02&r=ias |
| By: | Hiroyuki Yamada (Associate Professor, Osaka School of International Public Policy (OSIPP)); Satoshi Shimizutani (Research Fellow, Research Division, Gender Equality Bureau, Cabinet Office) |
| Abstract: | This paper examines the labor supply outcomes of family care provision for Japanese households in 2010, ten years after the introduction of the public long-term care insurance (LTCI) program. We found that family care provision for parents adversely affected labor market outcomes of main caregivers at home in terms of probability of working, employment status and hours worked. The adverse effect was found to be more serious for female caregivers than for male caregivers. Moreover, our results suggest that the public LTCI program seems to only partially mitigate the disadvantages of the main caregivers for both males and females. |
| Keywords: | Informal care, Caregiver, Long-term care insurance, Labor supply, Japan |
| JEL: | J22 I11 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:osp:wpaper:14e004&r=ias |
| By: | Catalina Bolance (Department of Econometrics, Riskcenter-IREA, Universitat de Barcelona); Montserrat Guillen (Department of Econometrics, Riskcenter-IREA, Universitat de Barcelona); David Pitt (Department of Applied Finance and Actuarial Studies, Macquarie University) |
| Abstract: | This paper presents an analysis of motor vehicle insurance claims relating to vehicle damage and to associated medical expenses. We use univariate severity distributions esti- mated with non-parametric methods. The methods are implemented using the statistical package R. The nonparametric analysis presented involves kernel density estimation. We illustrate the benefits of applying transformations to data prior to employing kernel based methods. We use a log-transformation and an optimal transformation amongst a class of transformations that produces symmetry in the data. The central aim of this paper is to provide educators with material that can be used in the classroom to teach statis- tical estimation methods, goodness of fit analysis and importantly statistical computing in the context of insurance and risk management. To this end, we have included in the Appendix of this paper all the R code that has been used in the analysis so that readers, both students and educators, can fully explore the techniques described. |
| Keywords: | Loss modeling, insurance, finance |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:bak:wpaper:201401&r=ias |
| By: | Silfverberg, Raymunda R. |
| Abstract: | This study established the breadth of socialized Philippine health insurance, known as the PhilHealth Sponsored Program. It examined the extent of coverage relative to its target "poor" population, how much coverage rates varied across provinces and the factors likely to explain variation. PhilHealth Sponsored Program appeared to have attained universal coverage over the targeted "poor" population at the national level for the year 2011. However, universal coverage was not true in all regions or provinces. Majority of provinces experienced mild to extreme leakages in the program. Several demand and supply variables identified to have strong statistical significance in explaining variations were age-groups, education, LGUs` real per capita income, health expenditures, governance style, accessibility to PHIC support offices and availability of health professionals, all of which were found to very likely affect undercoverage rates relative to full coverage. Severity of poverty, administrative and political governance, and availability of accredited RHUs and private hospitals provided strong statistical evidence in influencing the levels of leakage vis-a-vis full coverage. Effects of most variables conformed to expectations. Results of the study point to a number of research issues that can be undertaken and some policy recommendations addressed to the national agencies and local government implementers and financiers for the PhilHealth Sponsored Program. |
| Keywords: | Philippines, PhilHealth Sponsored Program, universal coverage, national health insurance, regional/provincial PhilHealth coverage, NHTS-PR data, Good Governance Index (GGI) |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2014-19&r=ias |
| By: | Casey B. Mulligan |
| Abstract: | Under the Affordable Care Act, between six and eleven million workers would increase their disposable income by cutting their weekly work hours. About half of them would primarily do so by making themselves eligible for the ACA's federal assistance with health insurance premiums and out-of-pocket health costs, despite the fact that subsidized workers are not able to pay health premiums with pre-tax dollars. The remainder would do so primarily by relieving their employers from penalties, or the threat of penalties, pursuant to the ACA's employer mandate. Women, especially those who are not married, are more likely than men to have their short-term financial reward to full-time work eliminated by the ACA. Additional workers, beyond the six to eleven million, could increase their disposable income by using reduced hours to climb one of the "cliffs" that are part of the ACA's mapping from household income to federal assistance. |
| JEL: | E24 H21 I38 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20020&r=ias |