Risk Self-Selection and the Concept of Equilibrium in a Competitive Insurance Market

The purpose of this paper is an analysis of the presence of self-selection mechanisms on the market that could bring the market closer to the separating equilibrium state, in line with the Rothschild–Stiglitz equilibrium model and its subsequent modifications. An example is the Polish market of compulsory third-party liability insurance of vehicle owners. This paper describes this market in terms of both its structure and its financial results. The main focus is on describing the assumptions of the Rothschild–Stiglitz model for markets operating under the conditions of information asymmetry and based on the self-selection mechanism, allowing for an unequivocal determination of the insured’s profile without the need to actually observe the insured’s behaviour. Finally, we show that thanks to the self-selection induced by the possibility of driving behaviour monitoring, the industry can minimise the negative effect information asymmetry has on the motor insurance market. This can be achieved, for example, by observing the choices made by the insured after being offered a new voluntary contract with a premium based on telematics data. Our analysis was carried out with the use of three selected characteristics that can determine the insured’s risk profile, i.e., distance covered, self-assessment, and insurance premium paid; the significance of the latter—although it may be intuitive—is questionable at commonly accepted significance levels. Therefore, the main result is that although there is some evidence on the disputed matter, there can be no definitive conclusion—especially in terms of risk as measured by insurance premium.

Analysis of farmers’ perceptions of the rice farming AUTP program in Landak Regency

Farmers in Landak Regency more frequently face uncertainty and risk of rice farming failure. Therefore, a program that can protect the farmers from the risk is required. Rice farming business insurance (AUTP) is an alternative to overcome the risk of loss due to crop failures. The limited information and knowledge of farmers regarding the AUTP have led to different perceptions among farmers and have affected the farmers’ enthusiasm to become the insurance participants. This research aimed to analyse the farmers’ perceptions of the AUTP program and its implementation mechanisms in Sengah Temila Subdistrict, Landak Regency. A descriptive method with Likert scale was used to analyse the farmers’ perceptions. The research results show that the farmers’ perceptions are at high category with the total score of 3048, indicating that they agree with the AUTP; the highest indicator (195) was that the program objective is protecting the farmers from crop failures, and the lowest indicator (153) was that the program gets success when the farmers agree to pay the insurance premium fully. In general, the implementation of the AUTP in Landak Regency was in accordance with the 2018 AUTP Premium Assistance Guidelines.

Lognormal and log-logistic distribution mixture analysis and application

In this paper, we analyze a mixture of Lognormal and Log-Logistic distribution. We estimate the parameters of the introduced distribution by using the expectation-maximization (EM) algorithm. Various phenomena in the field of medicine and economy could be modeled by this mixture. In this paper, it is used to construct new mortality model for determining the unisex premium rates in life insurance. The application of the model is illustrated in the case of Serbian population and its advantages are presented in the context of life insurance premium calculation.

The impact of digitalization on the economic convergence of the Russian insurance market

The most important trends in the modern economy are convergence – the process of convergence of activities of various economic entities and digitalization. Their interaction creates new opportunities for increasing the competitiveness and efficiency of insurance companies. The purpose of the paper is to identify economic convergence processes taking place on the Russian insurance market, which, when using different digitalization products, lead to new business models of partnership. The results of the conducted empirical analysis confirm the existence of economic convergence processes at all levels (intra-segment, intersegment and inter-sectoral) on the Russian insurance market. The proof of this is the significant reduction in the number of insurers in 2021 to 158, compared to 600 insurers in 2011. Over the past three years, the share of sales of insurance products with the participation of banks acting as intermediaries in the sales of insurance services has increased by 1.5 times. Also, along with insurance companies, health care companies have increasingly become involved in such operations. Digitalization products (information technologies (IT); IT and IT platforms; IT, IT platforms and networks) have a huge impact on the forms of organizing joint business with the participation of insurance companies. Some insurance companies do not provide opportunities to issue an insurance policy online or pay an insurance premium, i.e. they use sites for only minor customer interactions. Most often, Russian insurance companies use mobile applications. The impact of various digitalization products at different levels of economic convergence of insurers initiates multivariate business models of joint business.

Smallholder Farmers’ Access to Agricultural Insurance Schemes: An Analysis of the Inhibitors in Kogi State, Nigeria

The study examined the constraints of access to the use of agricultural insurance schemes (AIS) by small-scale farmers in Kogi State, Nigeria. Sustainable agricultural enterprise in most developing countries like Nigeria can be achieved through adequate financing especially in the area of agricultural insurance. Despite the existence of insurance services by the Nigerian Agricultural Insurance Corporation and other private firms in Nigeria, there has been a low level of participation of farmers buying insurance premium; thus, there is a need to examine the hindrances in accessing the scheme. The specific objectives were to describe the socio-economics characteristic of small- scale farmers, examine the types of agricultural insurance and evaluate the constraints in accessing AIS in the study area. Primary data were collected from 150 farmers with the aid of a well-structured questionnaire. Data were analyzed using descriptive statistics. Results showed that farmers in the study area were dominated by the married (68%), literates (81.33) and males (73.33%) with the mean age and farming experience of 47 and 19 years respectively. Crop insurance (56%) and farm implement insurance (46%) were the major types of agricultural insurance used by the farmers. Rigorous procedures in claim settlement (3.266), poor government attention (3.106) poor repayment (3.080) and non-coverage of all the crops (3.093) were among the major challenges in accessing AIS) in the study area. The study recommended that the government through the ministry of Agriculture or Bank of Agriculture should eliminate the bureaucratic processes and bottlenecks encountered by the farmers in accessing AIS.

Improving mariculture insurance premium rate calculation using an information diffusion model

Mariculture is a well-known high-risk industry. However, mariculture insurance, which is an important risk management tool, is facing serious market failure. An important reason for this market failure lies in the unsound premium rate and pricing method. Due to a lack of long-term yield data, empirical rates are often adopted, but this adoption can lead to a high loss ratio. This paper provides an improved method for premium computation of mariculture insurance using an information diffusion model (IDM). An example of oyster insurance in China shows that, compared with the traditional pricing approach, the IDM can greatly improve the accuracy and stability of premium rate calculations, especially in cases of small samples.

OSIGURANjE ŽIVOTA

Life insurance is the field of insurance which covers all those types of insurance where the occurrence of the insured accident is connected to a certain event in the life of the insured person. There are two basic types of life insurance: life insurance in case of death of the insured person and annuity insurance in case the insured person lives longer, t.i beyond the insured life term. Life insurance is the insurance where the insurer for a certain insurance premium assumes the obligation to pay to the insured person or the other beneficiary designated by the insured person a certain sum of money in case of his death or annuity installments in case he lives longer then the agreed life term. Although originally, life insurance was forbidden and was considered to be an unethical legal activity, today life insurance is accepted in legislations and in practice worldwide and it has been proven as a very beneficial and justified institute. This type of service is offered by insurance companies with an investment aspect which allows life insurance to keep its traditional function (protection from various risks – death, disability, life longer than the agreed insurance term), but also to have a wider, macroeconomic function in the form of savings and investment. This service has not been widely accepted in the Republic of Serbia although it is regulated by both the Law on insurance and the Law of contract and torts. In the 1990s it almost ceased to exist, while nowadays it started to revive, but with far less cases than in EU countries and other countries of developed world.

PENENTUAN PREMI DAN CADANGAN PADA ASURANSI PENDIDIKAN DENGAN MEMERHATIKAN PELUANG HIDUP ANAK

Education insurance provides services in the field of education. In education insurance, the insured not only gets protection benefits but also education funds. These benefits will be received if they have paid premiums. Insurance companies also need to set the exact amount of policy value. The purpose of this study is to determine the premium and policy value of education insurance by taking into account the child's life chances. In this study, used secondary data from the 2011 Indonesian Mortality Table and illustrated data in the form of education fund data. Premium is obtained using the equivalence principle and policy value is obtained using the prospective method. In the calculation of premiums and policy values for education insurance premiums by taking into account the child's life chances, modifications are made, the amount of education funds multiplied by the child's life chances. The results given in this study are the amount of education insurance premium by taking into account the child's life chances is Rp 6.946.456,00. Policy value increases during the disbursement of education funds and decreases at the end of coverage.

THE IMPACT OF HEALTH SUBSIDY ON HEALTH CARE UTILIZATION IN INDONESIA

Equal opportunity and access to health care services regardless of one’s socio-economic background is important for health equity. To achieve this, the Indonesian government introduced a national health insurance program named Jaminan Kesehatan Nasional in 2014 and provided insurance premium subsidies for poor people. The current study evaluates the health subsidy policy’s impact on the utilization of different kinds of health care facilities, both public and private. Two waves of Indonesian socio-economic surveys, namely 2013 and 2018, and two analysis methods, namely logistic regression, and difference-in-differences, were applied in this study. The results show that in first-level health care facilities, the health subsidy improves the probability of outpatient visits in public health centers and polyclinics but decreases the probability of outpatient visits in medical practices. Then, in secondary-level health care facilities, the health subsidy was found to increase the likelihood of outpatient visits in public hospitals; however, it lowers the probability of outpatient visits in private hospitals.

Efavirenz Is Not Associated with an Increased Risk of Depressive Disorders in Patients Living with HIV: An 11-Year Population-Based Study in Taiwan

(1) Background: This study aimed to determine the association between the use of efavirenz and depressive disorders among human immunodeficiency virus (HIV)-infected patients. (2) Methods: A retrospective cohort study was conducted using Taiwan’s National Health Insurance Database. We identified patients receiving anti-retroviral therapy (ART) between 2000 and 2009; these patients were followed until 2010 for diagnoses of depressive disorders using the Cox proportional hazard model to estimate hazard ratios. (3) Results: After up to 11 years of follow-up, the incidence of depressive disorders for the efavirenz-treated group was estimated at 12.2/1000 person-years (PYs), and the control group was at 12.5/1000 PY (p = 0.822). The independent risk factors for depressive disorders included an insurance premium of less than NTD 17,820 (New Taiwan Dollars—NTD) (adjusted hazard ratio (aHR) 2.59, 95% confidence interval (CI), 1.79–3.76, p < 0.001), and between NTD 17,821 and NTD 26,400 (aHR 1.55, 95% CI, 1.04–2.31, p = 0.030), living in Southern Taiwan (aHR 1.49, 95% CI, 1.21–1.84, p = 0.002), and with a psychiatric history (excluding depressive disorders) (aHR 4.59, 95% CI, 3.51–6.01, p = 0.030). (4) Conclusions: This study concluded that ART-treated patients with a past history of psychiatric disorders, lower insurance premium, and living in Southern Taiwan have an increased risk of depressive disorders, which are not associated with the use of efavirenz.