Yes, No, Perhaps? Premium Risk and Guaranteed Renewable Insurance Contracts With Heterogeneous Incomplete Private Information

Peter, Richard; Richter, Andreas und Steinorth, Petra (2016): Yes, No, Perhaps? Premium Risk and Guaranteed Renewable Insurance Contracts With Heterogeneous Incomplete Private Information. In: Journal of Risk and Insurance, Bd. 83, Nr. 2: S. 363-385

Abstract

The article shows that heterogeneous incomplete private information can explain the limited existence of guaranteed renewable health insurance (GR) contracts in an otherwise frictionless markets. We derive a unique equilibrium that can be of the form that either only a portion of the population or none will cover themselves against premium risk with a GR contract. Increased risk aversion, increased premium risk, and first-order stochastic improvements of the distribution of private information increase the likelihood of positive take-up. In case GR contracts are in demand, increased risk aversion and first-order stochastic improvements of the distribution of private information lead to more individuals purchasing the GR contract.

• Dokumententyp: Zeitschriftenartikel
• Fakultät: Betriebswirtschaft > Institut für Risikomanagement und Versicherung
• Themengebiete: 300 Sozialwissenschaften > 330 Wirtschaft
• ISSN: 0022-4367
• Sprache: Englisch