|
on Insurance Economics |
|
Issue of 2019‒09‒16
eleven papers chosen by Soumitra K. Mallick Indian Institute of Social Welfare and Business Management |
| By: | Ilona Tomaszewska (Warsaw School of Economics, Poland) |
| Abstract: | Underwriting is an important element of the assessment and valuation process of insurance risk. The aim of this process is the proper construction of the insurance portfolio by defining criteria indicating the risk appetite by the insurer, at the same time having a real impact on the technical result. Each insurance company specifies its own guidelines on risk tolerance, both regarding the entity and the subject of insurance. What variables are taken into account when determining the risk parity depends on the strategy adopted by the management of the company, guidelines defined within the capital group or simply by the risk appetite. Less restrictive or even other set of parameters is determined if the purpose of the insurance company is to achieve the highest possible gross written premium, understood as collecting the highest value of premium and volume of customers. Other parameters will be considered when the insurance company focuses on achieving a certain profitability index. Still others, when the purpose of the company is to diversify the vehicle portfolio and, for example, to open up to more expensive vehicles.The aim of the study is to show how important for motor insurance is underwriting process conducted by the insurer, what are its elements for MTPL as for casco, and how underwriting process affects the quality of the insurance company's portfolio. |
| Keywords: | underwriting, motor insurance, referrals, policy, risk |
| JEL: | G22 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:9011481&r=all |
| By: | Jack Gettens; Alexis Henry; Pei-Pei Lei |
| Abstract: | Health insurance coverage does not fully meet the employment-related healthcare needs of employed and potentially employed persons with disabilities. |
| Keywords: | health insurance, employment, disability |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:d0a1bf61cbf940eebd08de38199eec7c&r=all |
| By: | Mörk, Eva (Department of Economics); Sjögren, Anna (Department of Economics); Svaleryd, Helena (Department of Economics) |
| Abstract: | We study the consequences of mothers’ and fathers’ job loss for parents, families, and children. Rich Swedish register data allow us to identify plant closures and account for non-random selection of workers to closing plants by using propensity score matching and controlling for pre-displacement outcomes. Our overall conclusion is positive: childhood health, educational and early adult outcomes are not adversely affected by parental job loss. Parents and families are however negatively affected in terms of parental health, labor market outcomes and separations. Limited effects on family disposable income suggest that generous unemployment insurance and a dual-earner norm shield families from financial distress, which together with universal health care and free education is likely to be protective for children. |
| Keywords: | Parental unemployment; workplace closure; family environment; child health; human capital formation |
| JEL: | I12 J01 |
| Date: | 2019–08–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2019_007&r=all |
| By: | Connor, Lawson |
| Keywords: | Production Economics |
| Date: | 2019–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea19:291150&r=all |
| By: | Iizuka, Toshiaki; Shigeoka, Hitoshi |
| Abstract: | We examine how children's healthcare utilization responds to prices by exploiting over 10,000 variations in the levels and forms of patient cost-sharing across Japanese municipalities over time. Free care significantly increases outpatient spending, with price elasticities considerably smaller for children than adults. Small copayments alongside free care reduce utilization of healthier—rather than sicker—children, suggesting that moral hazard can be reduced without increasing financial and health risks. We find that cost-sharing is a "blunt tool," affecting utilization regardless of service type. Increased outpatient spending from free care neither improves short- and medium-term health outcomes nor reduces future healthcare spending |
| Keywords: | Children, Patient Cost-Sharing, Healthcare Utilization, Price Elasticity, Zero-price Effects, Moral Hazard |
| JEL: | I18 I13 I11 J13 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hitcei:2019-5&r=all |
| By: | Renata Pajewska-Kwa?ny (Warsaw School of Economics) |
| Abstract: | Over past few years, a steady and dynamic development of the private healthcare sector has been observed in Poland. The main underlying factor of this phenomenon is connected with the insufficiency of the public healthcare system. Another factor, which is a desire to satisfy healthcare needs on the high, exclusive level by the richest group of clients, appears to be less significant. The results of regularly carried social research in Poland, under the ?Social Diagnosis? project clearly show that one of the highly appreciated values is health, regardless the social group, the rich and the poor, the elderly and the younger generation. However, the use of private sector services generates high costs, especially in case of chronic diseases or frequent family members? diseases. In such situations private sector services, based on priciples out of pocket, entail high costs which exceed financial capability of many households. In order to meet the expectations, like in developed western economies, private health insurance appeared in Poland about 15 years ago ? being a market response for the social healthcare needs.Despite a countless legal, political and economic obstacles, the area of commercial healthcare insurance is evolving dynamically as a subject of transformation connected with the gradually changing attitude of Poles towards this issue. Insurance companies, in their operating strategies, are devoting more and more space to creating new product offer in terms of cost treatment insurance.Thus, the aim of this research is the analysis of changes, in both the quantity and quality range, which have been noticed recently in the field of commercial healthcare insurances in Poland with the process of all commercial insurances in the background. Particular attention will be paid to the issues of the evolution of risk management in health insurance, and thus change of approach to the offered insurance products. |
| Keywords: | healthcare sector, health insurance, insurance policy, commercial insurance |
| JEL: | I13 G22 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:9011480&r=all |
| By: | Claire Richert (UMR G-EAU - Gestion de l'Eau, Acteurs, Usages - IRD - Institut de Recherche pour le Développement - IRSTEA - Institut national de recherche en sciences et technologies pour l'environnement et l'agriculture - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - AgroParisTech - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement); Katrin Erdlenbruch (UMR G-EAU - Gestion de l'Eau, Acteurs, Usages - IRD - Institut de Recherche pour le Développement - IRSTEA - Institut national de recherche en sciences et technologies pour l'environnement et l'agriculture - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - AgroParisTech - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement, CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier); Frédéric Grelot (UMR G-EAU - Gestion de l'Eau, Acteurs, Usages - IRD - Institut de Recherche pour le Développement - IRSTEA - Institut national de recherche en sciences et technologies pour l'environnement et l'agriculture - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - AgroParisTech - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement) |
| Abstract: | Floods can be managed at the collective and individual level. Knowing the interaction between measures taken at both scales can help design more efficient flood risk management policies. Here, we combine the data collected during a survey of 331 inhabitants of flood-prone areas in the South of France and spatial databases to empirically examine the interaction between individual adaptation measures and three types of collective management tools: a national insurance scheme, dikes, and zoning instruments. In line with the levee effect hypothesis, we found that dike protection reduces the probability to have or take individual adaptation measures and that this effect could be mitigated by zoning instruments. Moreover, we found that the national insurance scheme does not crowd out individual adaptation. |
| Keywords: | Zoning Mechanism,Insurance,Flood policies,Levee effect,Individual adaptation decisions |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpceem:hal-02173121&r=all |
| By: | Anne-Sophie Krah; Zoran Nikoli\'c; Ralf Korn |
| Abstract: | Under the Solvency II regime, life insurance companies are asked to derive their solvency capital requirements from the full loss distributions over the coming year. Since the industry is currently far from being endowed with sufficient computational capacities to fully simulate these distributions, the insurers have to rely on suitable approximation techniques such as the least-squares Monte Carlo (LSMC) method. The key idea of LSMC is to run only a few wisely selected simulations and to process their output further to obtain a risk-dependent proxy function of the loss. In this paper, we present and analyze various adaptive machine learning approaches that can take over the proxy modeling task. The studied approaches range from ordinary and generalized least-squares regression variants over GLM and GAM methods to MARS and kernel regression routines. We justify the combinability of their regression ingredients in a theoretical discourse. Further, we illustrate the approaches in slightly disguised real-world experiments and perform comprehensive out-of-sample tests. |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1909.02182&r=all |
| By: | Claudia Ceci; Katia Colaneri; R\"diger Frey; Verena K\"ock |
| Abstract: | Reinsurance counterparty credit risk (RCCR) is the risk of a loss arising from the fact that a reinsurance company is unable to fulfill her contractual obligations towards the ceding insurer. RCCR is an important risk category for insurance companies which, so far, has been addressed mostly via qualitative approaches. In this paper we therefore study value adjustments and dynamic hedging for RCCR. We propose a novel model that accounts for contagion effects between the default of the reinsurer and the price of the reinsurance contract. We characterize the value adjustment in a reinsurance contract via a partial integro-differential equation (PIDE) and derive the hedging strategies using a quadratic method. The paper closes with a simulation study which shows that dynamic hedging strategies have the potential to significantly reduce RCCR. |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1909.04354&r=all |
| By: | Michail Anthropelos; Tim J. Boonen |
| Abstract: | We introduce a strategic behavior in reinsurance bilateral transactions, where agents choose the risk preferences they will appear to have in the transaction. Within a wide class of risk measures, we identify agents' strategic choices to a range of risk aversion coefficients. It is shown that at the strictly beneficial Nash equilibria, agents appear homogeneous with respect to their risk preferences. While the game does not cause any loss of total welfare gain, its allocation between agents is heavily affected by the agents' strategic behavior. This allocation is reflected in the reinsurance premium, while the insurance indemnity remains the same in all strictly beneficial Nash equilibria. Furthermore, the effect of agents' bargaining power vanishes through the game procedure and the agent who gets more welfare gain is the one who has an advantage in choosing the common risk aversion at the equilibrium. |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1909.01739&r=all |
| By: | Ivana Marinovic Matovic (Addiko Bank AD Belgrade, Serbia) |
| Abstract: | Bancassurance is not just a sale of insurance products at bank counters, but a complex cooperation involving both partners in the project realization, with the goal of satisfying their own interests as well as clients' interests. In the Republic of Serbia, banks began to deal with insurance activities in 2007. Since then, the sale of insurance products through banks has been constantly growing. The paper will present the current bancassurance models in the Republic of Serbia: integral distribution; expert distribution and combined distribution. The paper will present the comprehensive condition of bancassurance in the Republic of Serbia, above all the legal framework of the bancassurance concept; activities necessary for the successful implementation of bancassurance; market participants; competition among banking products and insurance products; the current level of cooperation between banks and insurance companies. Participants in the insurance market established by the Republic of Serbia, such as the National Mortgage Insurance Corporation, the Serbian Export Credit and Insurance Agency and the Deposit Insurance Agency, will be presented in paper, with an overview of the advantages and disadvantages of state insurance regulations. By gathering facts and data based on available literature and public databases, the current state of the insurance market and the possibilities for further development of bancassurance in the Republic of Serbia will be determined. The choice of a bancassurance model is essential for the successful functioning of the overall concept and its long-term sustainability in a dynamic business environment. The paper points to the fact that by designing an adequate bancassurance model, there may be a significant development of the Serbian financial services market. |
| Keywords: | Bancassurance, Insurance, Banking, Financial services, Republic of Serbia |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:smo:dpaper:08im&r=all |