ORCID: https://orcid.org/0000-0002-2588-4813 and Steinorth, Petra
(2016):
Yes, No, Perhaps? Premium Risk and Guaranteed Renewable Insurance Contracts With Heterogeneous Incomplete Private Information.
In: Journal of Risk and Insurance, Vol. 83, No. 2: pp. 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.
Item Type: | Journal article |
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Faculties: | Munich School of Management > Institute for Risk Management and Insurance |
Subjects: | 300 Social sciences > 330 Economics |
ISSN: | 0022-4367 |
Language: | English |
Item ID: | 43453 |
Date Deposited: | 27. Apr 2018, 08:04 |
Last Modified: | 26. Oct 2023, 05:09 |