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on Insurance Economics |
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Issue of 2021‒04‒12
nine papers chosen by Soumitra K. Mallick Indian Institute of Social Welfare and Business Management |
| By: | Dauth, Christine (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | Among health care systems with both public and private elements (such as in the US and Germany), an important question is whether the type of health insurance exerts an impact on workers' careers. We exploit the unique German case of a two-tier health care system to analyze whether opting out of public statutory health insurance and into private health insurance affects the specific health and employment outcomes of employed workers over a period of nine years. We exploit administrative registers and apply a fuzzy regression discontinuity design. We do not find any evidence that the type of health insurance affects employed workers' outcomes in the medium or long run. This suggests that even though private health insurance entails more comfortable healthcare conditions, public health insurance does not come with heavy health impairments or detrimental employment outcomes." (Author's abstract, IAB-Doku) ((en)) |
| JEL: | I13 J21 J30 |
| Date: | 2021–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:202103&r=all |
| By: | Adrianna L. McIntyre; Mark Shepard; Myles Wagner |
| Abstract: | There is growing interest in market design using default rules and other choice architecture principles to steer consumers toward desirable outcomes. Using data from Massachusetts’ health insurance exchange, we study an "automatic retention" policy intended to prevent coverage interruptions among low-income enrollees. Rather than disenroll people who lapse in paying premiums, the policy automatically switches them to an available free plan until they actively cancel or lose eligibility. We find that automatic retention has a sizable impact, switching 14% of consumers annually and differentially retaining healthy, low-cost individuals. The results illustrate the power of defaults to shape insurance coverage outcomes. |
| JEL: | D90 I13 I18 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28630&r=all |
| By: | Hossain, Md. Mobarak |
| Abstract: | This paper performs a systematic review on whether there is a relationship between health insurance and self-employment. There are three types of findings available regarding this issue in the entrepreneurship literature. First, health insurance clearly plays a vital role when individuals choose to become self-employed. Second, there is some evidence of the effect of health insurance on entrepreneurial choices for some individuals with some demographic characteristics, like married women, students, people with disabilities, etc. Third, the evidence of relationship between health insurance and entrepreneurial choices is anecdotal. |
| Keywords: | health insurance, entrepreneurship, self-employment |
| JEL: | I11 I13 J48 |
| Date: | 2021–01–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:105634&r=all |
| By: | Qikun Xiang; Ariel Neufeld; Gareth W. Peters; Ido Nevat; Anwitaman Datta |
| Abstract: | The cyber risk insurance market is at a nascent stage of its development, even as the magnitude of cyber losses is significant and the rate of cyber risk events is increasing. Existing cyber risk insurance products as well as academic studies have been focusing on classifying cyber risk events and developing models of these events, but little attention has been paid to proposing insurance risk transfer strategies that incentivize mitigation of cyber loss through adjusting the premium of the risk transfer product. To address this important gap, we develop a Bonus-Malus model for cyber risk insurance. Specifically, we propose a mathematical model of cyber risk insurance and cybersecurity provisioning supported with an efficient numerical algorithm based on dynamic programming. Through a numerical experiment, we demonstrate how a properly designed cyber risk insurance contract with a Bonus-Malus system can resolve the issue of moral hazard and benefit the insurer. |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2102.05568&r=all |
| By: | Anatoliy Swishchuk |
| Abstract: | We show how to solve Merton optimal investment stochastic control problem for Hawkes-based models in finance and insurance, i.e., for a wealth portfolio X(t) consisting of a bond and a stock price described by general compound Hawkes process (GCHP), and for a capital R(t) of an insurance company with the amount of claims described by the risk model based on GCHP. The novelty of the results consists of the new Hawkes-based models and in the new optimal investment results in finance and insurance for those models. |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2104.02694&r=all |
| By: | Paul Goldsmith-Pinkham; Maxim Pinkovskiy; Jacob Wallace |
| Abstract: | We use a five percent sample of Americans' credit bureau data, combined with a regression discontinuity approach, to estimate the effect of universal health insurance at age 65-when most Americans become eligible for Medicare-at the national, state, and local level. We find a 30 percent reduction in debt collections-and a two-thirds reduction in the geographic variation in collections-with limited effects on other financial outcomes. The areas that experienced larger reductions in collections debt at age 65 were concentrated in the Southern United States, and had higher shares of black residents, people with disabilities, and for-profit hospitals. |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2102.02142&r=all |
| By: | Dietmar Pfeifer; Vivien Langen |
| Abstract: | In this study, we will discuss recent developments in risk management of the global financial and insurance business with respect to sustainable development. So far climate change aspects have been the dominant aspect in managing sustainability risks and opportunities, accompanied by the development of several legislative initiatives triggered by supervisory authorities. However, a sole concentration on these aspects misses out other important economic and social facets of sustainable development goals formulated by the UN. Such aspects have very recently come into the focus of the European Committee concerning the Solvency II project for the European insurance industry. Clearly the new legislative expectations can be better handled by larger insurance companies and holdings than by small- and medium-sized mutual insurance companies which are numerous in central Europe, due to their historic development starting in the late medieval ages and early modern times. We therefore also concentrate on strategies within the risk management of such small- and medium-sized enterprises that can be achieved without much effort, in particular those that are not directly related to climate change. |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2102.02612&r=all |
| By: | Satoshi Shimizutani; Eiji Yamada |
| Abstract: | Tajikistan’s economy hinges heavily on remittance inflows mainly from Russia that have exceeded a quarter of annual GDP in recent years. The COVID-19 pandemic is likely to have adverse effects on the economy through damage to migration and remittances. We use a unique monthly household panel dataset that covers the period both before and after the outbreak to examine the impacts of COVID-19 on a variety of household welfare outcomes. We provide several brand-new findings. First, the adverse effects of the pandemic were particularly pronounced in April and May in 2020 but gradually diminished afterward, with some indicators leveling out in autumn. Second, in contrast to expectation, the pandemic had a sharp but only transitory effect on the stock of migrants working abroad in the spring. Some expected migrants were forced to remain in their home country during the border closures, while some of the incumbent migrants expecting to return were not able to do so, and remained employed in their destination countries. Both departures and returns started to increase again from summer. Employment and remittances of the migrants quickly recovered to levels seen in previous years, after a sharp decline in April and May. Third, regression analyses reveal that both migration and remittances have helped to mitigate the negative economic outcomes at home during the “with-COVID-19” period, suggesting that they served as a form of insurance. Overall, the unfavorable effects of the COVID-19 pandemic were severe and temporary right after the outbreak, but households with migrants were more resilient against the pandemic. |
| Keywords: | COVID-19, remittance, migration, Tajikistan, household welfare |
| Date: | 2021–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:jic:wpaper:218&r=all |
| By: | Isabelle Tsakok; Fatima Ezzahra Mengoub |
| Abstract: | Brazil, an oil-exporting nation, was still struggling to recover from the depression which started around 2014/15 when it was hit by a quick succession of shocks: the COVID-19 pandemic and the oil price collapse. The global pandemic triggered major economic dislocations and contractions in foreign and domestic markets, which further exacerbated the fall in demand for oil, sending world prices tumbling further. Poverty was already widespread in Brazil pre-pandemic. And despite recent progress, inequality is high, one of the highest in the world. So when disaster struck in early 2020, it was unsurprising that millions, especially in the two lower quintiles, suffered greater food insecurity while the upper quintile was barely hurt. The negative impact was also very uneven regionally: the poorer Northeast, the North and Center West suffered 8%-10% of income loss while the richer regions of the South and Southeast were least affected, with an income loss of 6%-7%. Fortunately, the difficult recession and pandemic period was preceded by a decade or so—2002-14—of GDP growth and reduced income inequality. During this ‘Golden Period’, Brazil made substantial progress on reducing poverty and strengthening major programs of social transfers, in particular the Bolsa Escola and the Bolsa Familia programs, which invested in the human capital of poor children and young people. When the dual shocks struck in early 2020, these programs were scaled up to mitigate the adverse impact of increased unemployment and income loss. In addition to these social transfers to the poor and vulnerable, Brazil has other sources of resilience. First, Brazil has a relatively large formal-sector workforce, which can draw on unemployment insurance and personal savings. Second, it has near-universal access to pensions and/or social security for the older population which is more vulnerable to COVID-19. Third, it has developed a robust institutional infrastructure for the delivery of emergency measures, notably its beneficiary registry, the Cadastro Unico, which has enabled the government to expand social transfers and emergency aid to the poor, who are mainly those working in the informal sector with unprotected jobs. Brazil’s resilience largely rests on three institutional pillars: (i) unemployment insurance for formal labor, the bulk of the workforce; (ii) pensions for the older population; and (iii) the Cadastro Unico for the poor who typically succeed in having only informal jobs. |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb07-21&r=all |