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on Insurance Economics |
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Issue of 2019‒03‒18
fourteen papers chosen by Soumitra K. Mallick Indian Institute of Social Welfare and Business Management |
| By: | Teh, Tse-Ling |
| Abstract: | Safety net assistance and insurance exist to manage risk and improve welfare. This shared goal may lead to crowding out. In a new approach, this paper analyzes the interaction of assistance with two dimensions of insurance design: level of coverage and types of risks covered. In a society of risk averse vulnerable individuals and risk neutral assistance providers, Pareto improvements in welfare are achieved through incom- pleteness in the types of risks covered. The results imply that safety nets promote demand for and the emergence of incomplete insurance. These results have a wide application to insurance markets where safety nets are available, including health care, disaster aid and social welfare. |
| JEL: | F3 G3 |
| Date: | 2017–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:69870&r=all |
| By: | Kanika Kapur |
| Abstract: | This study examines the determinants of demand for private health insurance in Ireland. Survey data commissioned by the Health Insurance Authority from 2009 to 2017 are used to estimate multivariate models of health insurance demand. The results show that older and sicker individuals are more likely to have private health insurance. Irish-born are found to be more likely to have private health insurance. Preferences for health insurance also play an important role in predicting the purchase of health insurance. After controlling for the role of socio-economic factors and individual preferences, annual variations in the economy are not found to affect private health insurance coverage. |
| Keywords: | Health insurance; Ireland |
| JEL: | I13 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201903&r=all |
| By: | Meital Graham-Rozen (Bank of Israel); Noam Michelson (Bank of Israel) |
| Abstract: | In this paper, we study credit insurance in Israel between 2010 and 2017, using a unique database provided for our use by ICIC—the Israeli Credit Insurance Company, the leading credit insurer in Israel. The research aims to determine what factors impact on the acceptance rate (the amount of insurance provided relative to the amount of insurance requested). This is the main parameter set by ICIC, and it reflects the pricing of the risks in each transaction. We find that the acceptance rate is impacted on primarily by the extent of the insurance company's exposure to the buyer's country, but also by the size of the insured company, the risk of the buyer with whom the company is transacting, and by the global real economic situation. These factors impact differently on domestic buyers and on buyers abroad, apparently due to differences in information on the two types of buyers. In addition, we examine the scope of exports insured by credit insurance and characterize them by geographical distribution and by risk levels. Finally, we examine—for the first time in Israel—suppliers' credit and find a strong link between suppliers' credit risk and real activity. |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:boi:wpaper:2018.03&r=all |
| By: | Laura Khoury (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique) |
| Keywords: | Unemployment,Behavioural response to benefits,Insurance design |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-02057137&r=all |
| By: | Syahputra, S |
| Abstract: | The purpose of this study is to discuss the impact of sales performance in life insurance sector. Sales performance in life insurance industry has seen a major concern to practitioners due to severe competition and to design marketing strategy. Further to that, one way to enhance sales performance in life insurance is by focusing on good strategy and developing salesforce. Life insurance need to have a good understanding of their strategy and salesforce management so that appropriate great marketing strategies directed towards sales management control strategy. The objective of this study is to examine the causal impact of several antecedents of sales performance in the context of insurance in Java Island, Indonesia. Thus, it will review the marketing literature on the sales performance ie., sales volume, market share, profitability and customer satisfaction. Next, we present the research framework, methods, measures and findings and conclusion. Finally, the results were discussed in terms of its contribution to the upgrading of life insurance strategies and recommendations for future research. |
| Keywords: | sales volume, market share, profitability, life insurance |
| JEL: | L1 M3 M31 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:92764&r=all |
| By: | Amanda Michaud (University of Western Ontario); David Wiczer (Stony Brook University) |
| Abstract: | We evaluate the contribution of changing macroeconomic conditions and demographics to the increase in Social Security Disability Insurance (SSDI) over recent decades. Within our quantitative framework, multiple sectors differentially expose workers to health and economic risks, both of which affect individuals’ decisions to apply for SSDI. Over the transition, falling wages at the bottom of the distribution increased awards by 27% in the 1980s and 90s and aging demographics rose in importance thereafter. The model also implies two-thirds of the decline in working-age male employment from 1985 to 2013, three-fourths of which eventually goes on SSDI. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:uwo:hcuwoc:20187&r=all |
| By: | Frimpong, Eugene; Petrolia, Daniel R.; Harri, Ardian; Cartwright, John H. |
| Abstract: | The Community Rating System (CRS) was introduced to encourage community-level flood mitigation and increase household-level flood insurance uptake through the National Flood Insurance Program (NFIP). Using historical data of policies-in-force and flood damage claims from 1998-2014 for all NFIP communities in Alabama and Mississippi, we estimate the relationship between community participation in the CRS and the number of policies-in-force, as well on flood damage claims. We find a significant, positive, and generally increasing effect of CRS participation on insurance uptake. Reduced flood damage claims are found to be limited to communities with a very high level of CRS participation (Class 5) only. |
| Keywords: | Environmental Economics and Policy, Land Economics/Use |
| Date: | 2019–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:ags:misswp:284989&r=all |
| By: | Unsorg, Maximiliane |
| Abstract: | Constantly rising expenditures for pharmaceuticals require government intervention in firms' pricing decisions. To this end, reference pricing systems are a frequently employed regulatory mechanism. This paper considers a duopoly market with vertically differentiated firms under different competition types. Starting from the existing literature it can be confirmed that the introduction of a reference price leads to lower equilibrium prices and induces fiercer competition between firms. Further, it can be shown that reference pricing promotes generic usage and leads to an increased market coverage. Hence, an improved provision of medical supply is achieved due to the lower prices and the stimulated demand for drugs. The paper demonstrates that even under the increased demand consumer and insurance expenditures are reduced. The model isolates the mechanisms of reference pricing and shows the effects on the consumer decisions. Lastly, consumer surplus increases when implementing the regulation. |
| Keywords: | reference pricing,pharmaceutical market,copayment,price cap,price competition,expenditures,consumer surplus |
| JEL: | I11 I18 L51 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuewef:115&r=all |
| By: | Radoslaw Paluszynski (University of Houston); Pei Cheng (UNSW Business School) |
| Abstract: | Life insurance premiums display significant rigidity in the data, on average adjusting once every 3 years by more than 10%. This contrasts with the underlying marginal cost which exhibits considerable volatility due to the movements in interest and mortality rates. We build and calibrate a model where policyholders are held-up by long-term insurance contracts, resulting in a time inconsistency problem for the firms. The optimal contract takes the form of a simple cutoff rule: premiums are rigid for cost realizations smaller than the threshold, while adjustments must be large and are only possible when cost realizations exceed it. |
| Keywords: | Life insurance, Time inconsistency, Hold-up problem, Commitment, Flexibility |
| JEL: | G22 L11 L14 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:swe:wpaper:2019-02&r=all |
| By: | Andrea Albanese (Luxembourg Institute of Socio-Economic Research, Ghent University, IZA - Institute of Labor Economics); Corinna Ghirelli (Banco de españa); Matteo Picchio (Marche Polytechnic university, Ghent University, IZA - Institute of Labor Economics, GLO - Global Labor Organization) |
| Abstract: | We study how unemployment benefit eligibility affects the layoff exit rate by exploiting quasiexperimental variation in eligibility rules in Italy. By using a difference-indifferences estimator, we find an instantaneous increase of about 12% in the layoff probability when unemployment benefit eligibility is attained, which persists for about 16 weeks. These findings are robust to different identifying assumptions and are mostly driven by jobs started after the onset of the Great Recession, in the South and for small firms. We argue that the moral hazard from the employer’s side is the main force driving these layoffs. |
| Keywords: | unemployment insurance, layoffs, employer–employee moral hazard, differencein-differences, heterogeneous effects |
| JEL: | C31 C41 J21 J63 J65 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:1904&r=all |
| By: | Andrea Albanese; Corinna Ghirelli; Matteo Picchio (-) |
| Abstract: | We study how unemployment benefit eligibility affects the layoff exit rate by exploiting quasi-experimental variation in eligibility rules in Italy. By using a difference-indifferences estimator, we find an instantaneous increase of about 12% in the layoff probability when unemployment benefit eligibility is attained, which persists for about 16 weeks. These findings are robust to different identifying assumptions and are mostly driven by jobs started after the onset of the Great Recession, in the South and for small firms. We argue that the moral hazard from the employer’s side is the main force driving these layoffs. |
| Keywords: | Unemployment insurance, layoffs, employer–employee moral hazard, differencein- differences, heterogeneous effects. |
| JEL: | C31 C41 J21 J63 J65 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:19/960&r=all |
| By: | Minke Remmerswaal (CPB Netherlands Bureau for Economic Policy Analysis); Jan Boone (CPB Netherlands Bureau for Economic Policy Analysis); Rudy Douven (CPB Netherlands Bureau for Economic Policy Analysis) |
| Abstract: | In the Netherlands, average healthcare expenditures of persons with a voluntary deductible are twice as high as average healthcare expenditures of persons without a voluntary deductible. When assessing the effects of voluntary cost-sharing in healthcare on healthcare expenditures, it is important to disentangle moral hazard from selection: are healthcare expenditures low because people pay (a bigger share of) their healthcare expenditures out-of-pocket? Or are people with higher cost-sharing levels healthier? In this study, we separate selection from moral hazard for the combined mandatory and voluntary deductible in the Netherlands. We use proprietary claims data from Dutch health insurers and exploit with a panel regression discontinuity design that we can observe healthcare expenditures before and after the deductibles kick in for 18 year olds. Our study shows that selection, not moral hazard, is the main effect explaining the difference in healthcare expenditures between persons with and without a voluntary deductible. Furthermore, we find that 18 year olds who never chose a voluntary deductible reduce their healthcare spending by 26 euros (on average) in response to a 100 euro increase in the (mandatory) deductible. However, for 18 year olds who chose a voluntary deductible (on top of the mandatory) we find that this choice does not result in a further reduction in healthcare spending. |
| JEL: | I11 I13 H51 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:393&r=all |
| By: | Radanliev, Petar; De Roure, Dave; Cannady, Stacy; Mantilla Montalvo, Rafael; Nicolescu, Razvan; Huth, Michael |
| Abstract: | This paper is focused on mapping the current evolution of Internet of Things (IoT) and its associated cyber risks for the Industry 4.0 (I4.0) sector. We report the results of a qualitative empirical study that correlates academic literature with 14 - I4.0 frameworks and initiatives. We apply the grounded theory approach to synthesise the findings from our literature review, to compare the cyber security frameworks and cyber security quantitative impact assessment models, with the world leading I4.0 technological trends. From the findings, we build a new impact assessment model of IoT cyber risk in Industry 4.0. We therefore advance the efforts of integrating standards and governance into Industry 4.0 and offer a better understanding of economics impact assessment models for I4.0. |
| Keywords: | IoT Cyber Risk,IoT risk analysis,IoT cyber insurance,IoT MicroMort,Cyber Value-at-Risk |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esconf:193692&r=all |
| By: | Radanliev, Petar; De Roure, Dave; Cannady, Stacy; Mantilla Montalvo, Rafael; Nicolescu, Razvan; Huth, Michael |
| Abstract: | This paper is focused on mapping the current evolution of Internet of Things (IoT) and its associated cyber risks for the Industry 4.0 (I4.0) sector. We report the results of a qualitative empirical study that correlates academic literature with 14 - I4.0 frameworks and initiatives. We apply the grounded theory approach to synthesise the findings from our literature review, to compare the cyber security frameworks and cyber security quantitative impact assessment models, with the world leading I4.0 technological trends. From the findings, we build a new impact assessment model of IoT cyber risk in Industry 4.0. We therefore advance the efforts of integrating standards and governance into Industry 4.0 and offer a better understanding of economics impact assessment models for I4.0. |
| Keywords: | IoT Cyber Risk, IoT risk analysis, IoT cyber insurance, IoT MicroMort, Cyber Value-at-Risk |
| JEL: | L0 L5 L50 L52 L53 O2 O20 O3 O30 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:92566&r=all |