A Model of Insurance Premium in Response to Probability of Loss
0
조회
0
다운로드
0
인용
0
참고문헌
초록
We apply a microeconomics model of the insurance firm designed to provide insight into firm price reaction to changes in loss probability. Based on the optimal insurance quantity and price from both consumer and firm points of view, comparative statics is shown in which buyer and seller interact to determine the insurance premium due to changes in the probability of loss. To test the theoretical model, we use a panel data set of 11 Korean liability insurance firms from 2008 to 2015. The regression results show that the insurance premium charged by the firm with more coverage benefit is more responsive to the probability of loss than that of the firm with less coverage benefit, in line with our theoretical result.
Abstract
We apply a microeconomics model of the insurance firm designed to provide insight into firm price reaction to changes in loss probability. Based on the optimal insurance quantity and price from both consumer and firm points of view, comparative statics is shown in which buyer and seller interact to determine the insurance premium due to changes in the probability of loss. To test the theoretical model, we use a panel data set of 11 Korean liability insurance firms from 2008 to 2015. The regression results show that the insurance premium charged by the firm with more coverage benefit is more responsive to the probability of loss than that of the firm with less coverage benefit, in line with our theoretical result.
참고문헌 (10)
- Appel, D, "Survivorship and the Size Distribution of the Property Liability Insurance", The Journal of Risk and Insurance, 52, pp.424~440 (1985)
- Beenstock, M, "The Relationship between Property-Liability Insurance Premiums and Income: An International Analysis", The Journal of Risk and Insurance, 55, pp.259~272 (1988)
- Berger, Lawrence A, "A Model of the Underwriting Cycle in the Property", Liability Insurance Industry, 1988, pp.55, 298~306
- Dafny, L, "Paying a Premium on Your Premiun? Consolidation in the US Health Insurance Industry", The American Economic Review, 102, pp.1161~1185 (2012)
- Doherty, N, "The Measurement of Output and Economies of Scale in Property-Liability Insurance", The Journal of Risk and Insurance, 48(3), pp.390~402 (1981)
- Finkelstein, A, "Multiple Dimensions of Private Information: Evidence from the Long-Term Care Insurance Market", American Economic Review, 96(4), pp.938~958 (2006)
- Grace, M. F, "External Impacts on the Property-Liability Insurance cycle", The Journal of Risk and Insurance, 62(4), pp.738~254 (1995)
- Joskow, P, "Cartels, Competition and Regulation in the Property-Liability Insurance Industry", The Bell Journal of Economics, 4, pp.375~427 (1973)
- Sommer, D. W, "The Impact of Firm Risk on Property-Liability Insurance Prices", The Journal of Risk and Insurance, 63(3), pp.501~514
- Starc, A, "Insurer Pricing and Consumer Welfare: Evidence from Medigap", The RAND Journal of Economics, 45(1), pp.198~220 (2014)