Risk awareness and adverse selection in catastrophe insurance: Evidence from California’s residential earthquake insurance market

2020 ◽  
Vol 61 (1) ◽  
pp. 43-65 ◽  
Author(s):  
Xiao Lin
Keyword(s):  
Adverse Selection ◽  
Insurance Market ◽  
Risk Awareness ◽  
Earthquake Insurance ◽  
Catastrophe Insurance

Evidence of Adverse Selection in the Group Insurance Market

2014 ◽  
Author(s):  
Martin Eling ◽  
Ruo Jia ◽  
Yi Yao
Keyword(s):  
Adverse Selection ◽  
Insurance Market ◽  
Group Insurance

Regulatory Adverse Selection in the Life Insurance Market

2004 ◽  
Author(s):  
Mattias K. Polborn ◽  
Michael Hoy ◽  
Asha Sadanand
Keyword(s):  
Adverse Selection ◽  
Life Insurance ◽  
Insurance Market

Adverse selection in a start-up long-term care insurance market ‐ Abstract of the London Discussion

2015 ◽  
Vol 20 (2) ◽  
pp. 348-365
Keyword(s):  
Adverse Selection ◽  
Long Term Care ◽  
Insurance Market ◽  
Publication Type ◽  
Term Care ◽  
Start Up ◽  
Long Term Care Insurance

This abstract relates to the following paper: AdamsC.Adverse selection in a start-up long-term care insurance market. British Actuarial Journal. doi:10.1017/S1357321714000270

scholarly journals Optimality and Equilibrium In a Competitive Insurance Market Under Adverse Selection and Moral Hazard

2013 ◽  
Author(s):  
Joseph Stiglitz ◽  
Jungyoll Yun
Keyword(s):  
Moral Hazard ◽  
Adverse Selection ◽  
Insurance Market

scholarly journals Evidence of adverse selection in automobile insurance market: A seemingly unrelated probit modelling

2017 ◽  
Vol 5 (1) ◽  
pp. 1330303 ◽  
Author(s):  
Noureddine Benlagha ◽  
Imen Karaa ◽  
Caroline Elliott
Keyword(s):  
Adverse Selection ◽  
Insurance Market ◽  
Automobile Insurance

scholarly journals California earthquake insurance unpopularity: the issue is the price, not the risk perception

2019 ◽  
Author(s):  
Adrien Pothon ◽  
Philippe Gueguen ◽  
Sylvain Buisine ◽  
Pierre-Yves Bard
Keyword(s):  
Risk Perception ◽  
Insurance Premium ◽  
Data Sources ◽  
Risk Awareness ◽  
Earthquake Insurance ◽  
New Model ◽  
Earthquake Losses ◽  
Widespread Belief ◽  
Gathering Data ◽  
Annual Premium

Abstract. Despite California is a highly seismic prone region, most of homeowners are not covered against this risk. This study analyses the reasons for homeowners to purchase or not an insurance to cover earthquake losses, with application in California. A dedicated database is built from 18 different data sources about earthquake insurance, gathering data since 1921. A new model is developed to assess the take-up rate based on the homeowners’ risk awareness and the average annual insurance premium amount. Results suggest that only two extreme situations would lead all owners to cover their home with insurance: (1) a widespread belief that a devastating earthquake is imminent, or alternatively, (2) a massive decrease in the average annual premium amount by a factor exceeding 6 (from $980 to $160, USD 2015). Considering the low likelihood of each situation, we conclude from this study that new insurance solutions are necessary to fill the protection gap.

scholarly journals Collusion in a One-Period Insurance Market with Adverse Selection

2012 ◽  
Vol 12 (1) ◽  
Author(s):  
Manuel Willington ◽  
Alexander Alegría
Keyword(s):  
Adverse Selection ◽  
Health Systems ◽  
Insurance Market ◽  
Free Entry ◽  
Common Features ◽  
Full Insurance

Abstract We show that collusive-seeming outcomes may occur in equilibrium in a one-period competitive insurance market characterized by adverse selection. We build on the Inderst and Wambach (2001) model and assume that insurance is compulsory and involves a minimum premium and minimum coverage; these are common features in many health systems. In this setup we show that there is a range of equilibria, from the zero profit one where low-risks implicitly subsidize high risks, to one where firms obtain profits with both types of consumers. Moreover, we show that rents only partially dissipate if we assume free entry. Along these equilibria, high risks always obtain full insurance, while the low risks' coverage decreases as the firms' profits increase.

An analysis of the California earthquake insurance market since its early stages

2020 ◽  
Author(s):  
Adrien Pothon ◽  
Philippe Guéguen ◽  
Sylvain Buisine ◽  
Pierre-Yves Bard
Keyword(s):  
San Francisco ◽  
Insurance Premium ◽  
Insurance Market ◽  
Insurance Company ◽  
Earthquake Insurance ◽  
Funding Sources ◽  
Risk Monitoring ◽  
Insurance Cover ◽  
Widespread Belief ◽  
Insurance Model

<p>Despite California being a highly seismic prone region, around 85% of people are not covered against this risk. This situation results from more than 100 years of evolution since the first earthquake insurance cover after the 1906 San Francisco earthquake. To understand this evolution, two analyses have been performed: the first one at the market level and the second one at the insured people level.</p><p>At the market level, as many variables as the premium amount, the risk monitoring, the funding sources of prevention plans, the insurance company’s solvency and the attractiveness of earthquake insurance solutions, have been investigated. By cross-analysing data collected and analysing the evolution with time, three different phases have been identified in the earthquake insurance market history.</p><p>At insured people level, a database is built from 18 different data sources about earthquake insurance, gathering data since 1921. Next, a new model is developed to assess the rate of homeowners insured against this risk, according to their risk awareness and the average annual insurance premium amount.</p><p>These two analyses are finally used to investigate in which extent the California earthquake insurance market could reach again 40% of people insured, like in 1993 and 1996. Even if results show that a widespread belief that a devastating earthquake is imminent could bring such a situation, only a new earthquake insurance model will allow to achieve this goal in a sustainable way. In that respect, the efficiency of two current initiatives to bring more people to get an earthquake insurance: "Earthquake Brace and Bolt" and "JumpStart Recovery", is assessed at the light of the analyses performed previously in this paper.</p>

Adverse selection, moral hazard, and wealth effects in the medigap insurance market

1991 ◽  
Vol 10 (4) ◽  
pp. 433-459 ◽  
Author(s):  
John R. Wolfe ◽  
John H. Goddeeris
Keyword(s):  
Moral Hazard ◽  
Adverse Selection ◽  
Insurance Market ◽  
Wealth Effects
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