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on Insurance Economics |
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Issue of 2014‒09‒05
seven papers chosen by Soumitra K. Mallick Indian Institute of Social Welfare and Business Management |
| By: | World Bank; International Monetary Fund |
| Keywords: | Insurance and Risk Mitigation Law and Development - Insurance Law Private Sector Development - Emerging Markets Finance and Financial Sector Development - Non Bank Financial Institutions Finance and Financial Sector Development - Debt Markets |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:19298&r=ias |
| By: | World Bank; International Monetary Fund |
| Keywords: | Insurance and Risk Mitigation Macroeconomics and Economic Growth - Climate Change Economics Private Sector Development - Emerging Markets Finance and Financial Sector Development - Debt Markets Law and Development - Insurance Law |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:19297&r=ias |
| By: | World Bank; International Monetary Fund |
| Keywords: | Finance and Financial Sector Development - Access to Finance Finance and Financial Sector Development - Deposit Insurance Private Sector Development - Emerging Markets Finance and Financial Sector Development - Bankruptcy and Resolution of Financial Distress Finance and Financial Sector Development - Debt Markets |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:19296&r=ias |
| By: | Zhou, Jane |
| Abstract: | To ensure the availability of cleanup funds, federal regulators often require ex ante proof of ability-to-pay for future environmental liabilities. These regulations currently apply to hazardous waste managers under the Resource Conservation and Recovery Act, and are being considered for expanded applicability to other industries. Regulators have long expressed concern regarding the reliability of self-insurance. Little economic work, however, has studied the differing incentive effects of different financial assurance mechanisms, such as self-insurance, insurance, or trust funds. Using a novel facility-level panel dataset, I test this hypothesis using data on firm financial assurance and chemical spills. I find that self-insurance mechanisms are strongly associated with increased spill rates. This paper shows that with noncompetitive insurance markets, third-party financial instruments may act as “private regulators" and incentivize facilities to exercise increased care against environmental damage. This association may also result from high-risk firms' selection into self-insurance. |
| Keywords: | Hazardous waste, Liability, Judgement-proof, Financial responsibility, Insurance, Moral hazard, Resource Conservation and Recovery Act, Environmental Economics and Policy, Public Economics, Risk and Uncertainty, |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:umdrwp:182293&r=ias |
| By: | Hsing-Wen Han; Hsien-Ming Lien; Tzu-Ting Yang |
| Abstract: | Healthcare for young children is highly subsidized in many public health insurance programs around the world. However, the existing literature lacks evidence on how the demand for young children's healthcare reacts to these medical subsidy policies. This paper exploits a sharp increase in patient cost-sharing at age 3 in Taiwan that results from young children "aging out" of the cost sharing subsidy. This price shock on the 3rd birthday allows us to use a regression discontinuity design to examine the causal effect of cost sharing on the demand for young children's healthcare by comparing the expenditure and utilization of healthcare for young children right before and after the 3rd birthday. Our results show that the increased patient cost sharing at the 3rd birthday significantly reduces total outpatient expenditure. The implied arc-elasticity of outpatient expenditure is around -0.10. However, the demand for inpatient care for young children does not respond to a change in cost sharing at the 3rd birthday even though the price variation is much larger. This result implies that the full coverage of inpatient care could improve the welfare of young children. |
| Keywords: | patient cost-sharing, health insurance, children health |
| JEL: | G22 I12 I18 J13 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:cch:wpaper:14c003&r=ias |
| By: | Berdin, Elia; Gründl, Helmut |
| Abstract: | Low interest rates are becoming a threat to the stability of the life insurance industry, especially in countries such as Germany, where products with relatively high guaranteed returns sold in the past still represent a prominent share of the total portfolio. This contribution aims to assess and quantify the effects of the current low interest rate phase on the balance sheet of a representative German life insurer, given the current asset allocation and the outstanding liabilities. To do so, we generate a stochastic term structure of interest rates as well as stock market returns to simulate investment returns of a stylized life insurance business portfolio in a multi-period setting. Based on empirically calibrated parameters, we can observe the evolution of the life insurers' balance sheet over time with a special focus on their solvency situation. To account for different scenarios and in order to check the robustness of our findings, we calibrate different capital market settings and different initial situations of capital endowment. Our results suggest that a prolonged period of low interest rates would markedly affect the solvency situation of life insurers, leading to relatively high cumulative probability of default for less capitalized companies. -- |
| Keywords: | Life Insurers,Interest Rate Guarantees,Risk Assessment,Solvency II |
| JEL: | G22 G23 G17 E58 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:safewp:65&r=ias |
| By: | Neale Mahoney; E. Glen Weyl |
| Abstract: | Standard policies to correct market power and selection can be misguided when these two forces co-exist. Using a calibrated model of employer-sponsored health insurance, we show that the risk adjustment commonly used by employers to offset adverse selection often reduces the amount of high-quality coverage and thus social surplus. Conversely, in a model of subprime auto lending calibrated to Einav, Jenkins and Levin (2012), realistic levels of competition among lenders generate a significant oversupply of credit, implying greater market power is desirable. We build a model of symmetric imperfect competition in selection markets that parameterizes the degree of both market power and selection and use graphical price-theoretic reasoning to provide a general analysis of the interaction between selection and imperfect competition. We use the same logic to show that in selection markets four principles of the United States Horizontal Merger Guidelines are often reversed. |
| JEL: | D42 D43 D82 I13 L10 L41 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20411&r=ias |