Insurance decisions under nonperformance risk and ambiguity

An important societal problem is that people underinsure against risks that are unlikely or occur in the far future, such as natural disasters and long-term care needs. One explanation is that uncertainty about the risk of non-reimbursement induces ambiguity averse and risk prudent decision makers to take out less insurance. We set up an insurance experiment to test this explanation. Consistent with the theoretical predictions, we find that the demand for insurance is lower when the nonperformance risk is ambiguous than when it is known and when decision makers are risk prudent. We cannot attribute the lower take-up of insurance to our measure of ambiguity aversion, probably because ambiguity attitudes are richer than aversion alone.

The concept of “demand” and its derivatives in the modern scientific insurance discourse

In the scientific literature concepts such concepts as “demand for insurance”, “demand for insurance services”, “insurance demand”, “demand for insurance products”, etc. are often used. While being simple in their intuitive reading, they are in fact not as unambiguous as they may seem at first glance. Since there is a semantic conditionality of the meaning of a derived word by the values of its components and they are also not always well-established, then terminological uncertainty arises. The negative effect is enhanced by the permissible mixing of concepts with each other or the creation of scholastic multivariability. Quite often, the definition of demand as a category is given a characteristic of the level of demand, and without taking into account its dimension and type. Moreover, there are defects in the choice of definitions and the construction of definitions, the dominance of recursive definitions that have no value for the full disclosure of the meaning and content of the defined. The author concludes about the inadmissibility of taking liberties in the interpretation of significant concepts and terms, careful construction of new turns with their participation. The problem of using concepts without giving meaning to their scientific content is posed.

Uncertainty and Demand for Insurance: A Theoretical Model of How Self-Control Manages the Optimal Decision-Making

With the present work, we aim to mark a beginning line on the study of decision-making of potential consumers in the insurance sector, with the long-term purpose of defining the optimal cognitive processes to be undertaken when deciding whether to purchase insurance or not. Decision-making in conditions of uncertainty is influenced by the dual-self model doers/planner integrated with the hot–cold states and prospect utility function. Thus, we present a theoretical model of choice-making to evaluate the level of optimal self-control necessary to be exerted if the individual is either in the hot or in the cold state depending on the arousal. This theoretical choice-making model lays the ground for the decision journey by following the long-term utility and avoiding gross mistakes that could lead the consumer not to insure, when the odds suggest doing it, or vice versa, in situations when it would not be necessary.

Poor Claims Settlement And Demand For Insurance Policies In Nigeria

This study investigates the poor claims settlement and demand for insurance policies in Nigeria to provide empirical evidence which would assist not only the insurance companies but also the policymakers by using these findings to design future insurance services and policies that can be geared towards promoting insurance market development. The population focused in the study included few licensed insurance firms in Nigeria. This is due to the fact that they dominate and control the larger interest in the market share. Primary data was used for this study through well-structured questionnaire. Chi- squared statistics and correlation with the tabulated contingency table on the basis of an assumptions were employed. The results show that poor claim settlement has significant effect on demand for Insurance policies in Nigeria and that there is long term and significant relationship between poor claim settlement and demand for insurance policies in Nigeria. The study therefore, recommends that insurance industry should be redefined through appropriate Acts, introducing competitions and innovations in the services so as to compete effectively and meet consumer needs by dealing with changing expectations of policyholders so as to ensure that satisfaction of all the parties are guaranteed.

An Investigation Into the Factors Inhibiting the Development of Date Crop Insurance: the Case of Saravan County

The viability and efficiency of crop insurance policies depend on farmers’ demand and willingness for crop insurance. The present paper analyzes the insurance demand of 441 date farmers in Saravan County. Data showed that 68.87% of the farmers did not agree with insurance. The results of the ordinal logit model at five different levels indicated that awareness of insurance benefits, insurance record, previous-year yield, educational level, the standard deviation of income, orchard area, and satisfaction with insurance services are the main variables influencing the demand for insurance. The coefficient of variation of the likelihood of insurance adoption was estimated at all five levels. A 1% increase in satisfaction with insurance services increases the likelihood of a person’s shift from the ‘strongly disagree’ category to the ‘disagree’ category by 6.3%. Older date farmers abstain from insurance adoption, which needs reflection given the religious view in the region on interest rates on the one hand and the resistance of older people against modern risk management methods on the other.

THE INFLUENCE OF THE CROWN CRISIS ON THE DEVELOPMENT OF INSURANCE BUSINESS IN THE WORLD

The article analyzes the impact of the COVID-19 pandemic on the world insurance market and some European countries. Separated economic indicators of the impact of the COVID-19 pandemic on the insurance business of the world are singled out. It was determined that the impact of the COVID-19 pandemic inspired declining incomes of insurers and households, rising unemployment, declining demand for insurance services, a significant decline in productivity of insurance companies, uncertainty about the future development of the insurance industry and the effects of the pandemic. The experience of the world insurers' struggle against the consequences of the COVID-19 pandemic has been studied and generalized. The latest tools that have allowed insurers around the world to mitigate or mitigate the negative impact of the crown crisis, in particular, are: the development of new insurance products; increasing the level of requirements for insurance services in terms of its relevance, price flexibility, mobility and transparency; transition of insurers to online sales of insurance services and online payments for insurance cases; direct funding of specific means of combating COVID-19; use of the latest technologies and innovative methods in the insurance business; introduction of a new mode of staff work in the activities of insurance companies. The transition of insurers to online sales of insurance services and online payments has revealed many unresolved issues regarding the insurer's cybersecurity. Insurers are forced to improve existing technologies and methods of control, to intensify training and information activities. The Crown Crisis has significantly increased the importance of modern underwriting. Therefore, insurers around the world are using the capabilities of artificial intelligence, alternative data sources and better forecasting models. Greater understanding of pandemic processes, gaining experience is needed not only to accelerate the way out of the modern pandemic, but also to form a stable insurance system to the inevitable future challenges. The study of positive experience in the functioning and development of insurance markets around the world in crises and shocks is useful for application in national practice.

The Conceptual Approaches to the Evolvement of Insurance Activity in Ukraine

The article is aimed at developing the conceptual approaches to the evolvement of insurance activity in Ukraine. It is defined that insurance is an important source of funds accumulation for their further use in order to compensate for losses caused by insurance events, as well as for protection of business from financial risks. The main components of the conceptual approaches to the evolvement of insurance activity are distinguished as follows: principles, goals, interests, tasks, factors, threats, subjects and objects, collateral, stages, instruments, methods and criteria for evaluating the efficiency of the development of insurance activities in the country. Within the framework of the proposed conceptual approaches to the evolvement of insurance activity in Ukraine, the following stages are allocated: development of methodological principles for the evolvement of insurance activity; analysis of conditions and factors of evolvement of insurance activity; assessment of the state of evolvement of insurance activity: study of the number of insurers, tendencies as to their increase/decrease, demand for insurance products, etc.; assessment of the effectiveness of evolvement of insurance activity in the country. It is concluded that the proposed conceptual approaches involve the development and implementation of a purposeful set of measures that will intensify insurance activities and contribute to the development of a strategy for the evolvement of the insurance market of Ukraine through the introduction of world experience, taking into account national peculiarities for its effective evolvement in the long term, avoiding and minimizing the negative impact in the dynamic environment. The strategic task of the State to evolve insurance activities in modern conditions of management is to implement effective regulation, which will facilitate the intensification of the development of the insurance market.