<scp>Evidence of Asymmetric Information in the Automobile Insurance Market: Dichotomous Versus Multinomial Measurement of Insurance Coverage</scp>

Kim, Hyojoung; Kim, Doyoung; Im, Subin; Hardin, James W.

doi:10.1111/j.1539-6975.2009.01302.x

Cited by 37 publications

(23 citation statements)

References 37 publications

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“…See also Kim et al (2009) who show similar results for Korean data and Dionne and Vanasse (1992) for Canadian data. 2039-2117(online) ISSN 2039 Mediterranean Journal of Social Sciences MCSER Publishing, Rome-Italy Vol 6 No 3 S1 May 2015 458…”

Section: The Accident Frequency Equation (Second Stage)supporting

confidence: 65%

“…One can refers to Dahlby (1983Dahlby ( /1992 for Canada, Puelz and Snow (1994) for USA, Richaudeau (1999) for France, Saito (2006) for Japan, Kim et al (2009) for Korea, Englund (2010) for Denmark, Shi and Valdez (2011) for Singapore, and Li et al (2013) for Taiwan case. Besides a recent review article by Dionne et al (2013) which summarized the theoretical and the empirical literature concerning asymmetric information in road safety and automobile insurance market.…”

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confidence: 99%

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Testing for Asymmetric Information in Tunisian Automobile Insurance Market

Karaa¹,

Benlagha²

2015

MJSS

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Asymmetric information has become one of the most influential theoretical concepts in explaining competitive insurance market. In contract theory, asymmetric information is the situation when one party of an economic transaction possesses information that is not available to the other contractual party.In this perspective, this paper aims to investigate the presence of asymmetric information in Tunisian automobile insurance market. This investigation is made using an individual data set during the year 2009. For this purpose, we employ two empirical approaches; the bivariate probit model and the two stages approach of Richaudeau (1999)

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Section: The Accident Frequency Equation (Second Stage)supporting

confidence: 65%

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confidence: 99%

Testing for Asymmetric Information in Tunisian Automobile Insurance Market

Karaa¹,

Benlagha²

2015

MJSS

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“…For other European health insurance systems, there is 1 In the health insurance context, medical expenditure data and other medical consumption data, i.e., number of hospital stays or nights, is often used to approximate the occurrence or severity of a loss. 2 In car insurance, the majority of studies have not found evidence of adverse selection (e.g., Chiappori and Salanié, 2000;Kim et al, 2009;Dionne et al, 2001;Zavadil, 2011). Finkelstein and Poterba (2004) find evidence of adverse selection with respect to the choice of different types of annuity insurance policies but not with respect to annuity size.…”

Section: Introductionmentioning

confidence: 99%

Demand and Selection Effects in Supplemental Health Insurance in Germany

2015

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in SOEPpapers on Multidisciplinary Panel Data Research at DIW BerlinThis series presents research findings based either directly on data from the German SocioEconomic Panel study (SOEP) or using SOEP data as part of an internationally comparable data set (e.g. CNEF, ECHP, LIS, LWS, CHER/PACO). SOEP is a truly multidisciplinary household panel study covering a wide range of social and behavioral sciences: economics, sociology, psychology, survey methodology, econometrics and applied statistics, educational science, political science, public health, behavioral genetics, demography, geography, and sport science.The decision to publish a submission in SOEPpapers is made by a board of editors chosen by the DIW Berlin to represent the wide range of disciplines covered by SOEP. There is no external referee process and papers are either accepted or rejected without revision. Papers appear in this series as works in progress and may also appear elsewhere. They often represent preliminary studies and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be requested from the author directly.Any opinions expressed in this series are those of the author(s) and not those of DIW Berlin.Research disseminated by DIW Berlin may include views on public policy issues, but the institute itself takes no institutional policy positions. Abstract:This paper empirically assesses the selection effects and determinants of the demand for supplemental health insurance that covers hospital and dental benefits in Germany. Our representative dataset provides doctor-diagnosed indicators of the individual's health status, risk attitude, demand for medical services and insurance purchases in other lines of insurance as well as rich demographic and socioeconomic information. Controlling for a wide range of individual preferences, we find evidence of adverse selection for individuals aged 65 and younger for hospital coverage despite initial individual underwriting by insurers. The reverse is true for individuals older than 65; individuals with supplemental hospital coverage are healthier on average. In addition, insurance affinity and income are the most important drivers of the demand for both types of coverage. JEL-Classification: D82, G22, I11

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“…Instead of using binary measures, Richaudeau (1999) performed a count regression on number of accidents and found no evidence of adverse selection. In contrast, Kim et al (2009) showed that a multinomial measure of policyholders' coverage selection could deliver extra evidence on asymmetric information that a dichotomous indicator could not have achieved.…”

Section: Introductionmentioning

confidence: 99%

Testing Adverse Selection with Two-Dimensional Information: Evidence from Singapore Auto Insurance Market

2011

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This article examines adverse selection in insurance markets within a two-dimensional information framework, where policyholders differ in both their riskiness and degree of risk aversion. Using this setup, we first build a theoretical model to make equilibrium predictions on competitive insurance screening. We study several variations on the pattern of information asymmetry. The outcomes range from full risk separation, to partial separation, to complete pooling of different risk types. Next, we examine results of this construction with an empirical investigation using a cross-sectional observation from a major automobile insurer in Singapore. To test for evidence of adverse selection, we propose a copula regression model to jointly examine the relationship between policyholders' coverage choice and accident occurrence. The association parameter in copula provides evidence of asymmetric information. Furthermore, we invoke the theory to identify subgroups of policyholders for whom one may expect the risk-coverage correlation and adverse selection to arise. The empirical findings are largely consistent with theoretical predictions.

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Evidence of Asymmetric Information in the Automobile Insurance Market: Dichotomous Versus Multinomial Measurement of Insurance Coverage

Cited by 37 publications

References 37 publications

Testing for Asymmetric Information in Tunisian Automobile Insurance Market

Testing for Asymmetric Information in Tunisian Automobile Insurance Market

Demand and Selection Effects in Supplemental Health Insurance in Germany

Testing Adverse Selection with Two-Dimensional Information: Evidence from Singapore Auto Insurance Market

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