Advantageous Selection in Insurance Markets

2001 ◽  
Vol 32 (2) ◽  
pp. 249 ◽  
Author(s):  
David de Meza ◽  
David C. Webb
Keyword(s):  
Insurance Markets ◽  
Advantageous Selection

scholarly journals Selection in Insurance Markets: Theory and Empirics in Pictures

2011 ◽  
Vol 25 (1) ◽  
pp. 115-138 ◽  
Author(s):  
Liran Einav ◽  
Amy Finkelstein
Keyword(s):  
Public Policy ◽  
Adverse Selection ◽  
Theoretical Basis ◽  
Empirical Work ◽  
Classical Case ◽  
Preventive Health Care ◽  
Insurance Markets ◽  
Risk Averse ◽  
Advantageous Selection ◽  
Policy Interventions

Government intervention in insurance markets is ubiquitous and the theoretical basis for such intervention, based on classic work from the 1970s, has been the problem of adverse selection. Over the last decade, empirical work on selection in insurance markets has gained considerable momentum. This research finds that adverse selection exists in some insurance markets but not in others. And it has uncovered examples of markets that exhibit “advantageous selection”—a phenomenon not considered by the original theory, and one that has different consequences for equilibrium insurance allocation and optimal public policy than the classical case of adverse selection. Advantageous selection arises when the individuals who are willing to pay the most for insurance are those who are the most risk averse (and so have the lowest expected cost). Indeed, it is natural to think that in many instances individuals who value insurance more may also take action to lower their expected costs: drive more carefully, invest in preventive health care, and so on. Researchers have taken steps toward estimating the welfare consequences of detected selection and of potential public policy interventions. In this essay, we present a graphical framework for analyzing both theoretical and empirical work on selection in insurance markets. This graphical approach provides both a useful and intuitive depiction of the basic theory of selection and its implications for welfare and public policy, as well as a lens through which one can understand the ideas and limitations of existing empirical work on this topic.

Advantageous Selection in Insurance Markets with Compound Risk

2017 ◽  
Vol 42 (2) ◽  
pp. 171-192 ◽  
Author(s):  
Rachel J. Huang ◽  
Arthur Snow ◽  
Larry Y. Tzeng
Keyword(s):  
Insurance Markets ◽  
Advantageous Selection

scholarly journals Advertising and Risk Selection in Health Insurance Markets

2018 ◽  
Vol 108 (3) ◽  
pp. 828-867 ◽  
Author(s):  
Naoki Aizawa ◽  
You Suk Kim
Keyword(s):  
Individual Heterogeneity ◽  
Insurance Markets ◽  
Risk Selection ◽  
Medicare Advantage ◽  
Healthy Individuals ◽  
Advantageous Selection ◽  
Health Insurance Markets ◽  
Distributional Implication ◽  
The Impact ◽  
Cross Subsidization

This paper studies the impact of advertising as a channel for risk selection in Medicare Advantage. We provide evidence that insurer advertising is responsive to the gains from risk selection. Then we develop and estimate an equilibrium model of Medicare Advantage with advertising, allowing rich individual heterogeneity. Our estimates show that advertising is effective in attracting healthy individuals who are newly eligible for Medicare, contributing to advantageous selection into Medicare Advantage. Moreover, risk selection through advertising substantially lowers premiums by improving insurers' risk pools. The distributional implication is that unhealthy consumers may be better off through cross-subsidization from healthy individuals. (JEL D81, G22, I13, I18, M37)

Studying the factors of regional insurance market development using the correlation and regression analysis

2020 ◽  
Vol 26 (7) ◽  
pp. 1610-1630
Author(s):  
E.L. Prokop'eva
Keyword(s):  
Regression Analysis ◽  
Federal District ◽  
Insurance Market ◽  
Market Development ◽  
Insurance Markets ◽  
Regression Equations ◽  
Factors Affecting ◽  
Correlation And Regression Analysis ◽  
Country Level ◽  
Inverse Effect

Subject. The article investigates and quantifies factors of insurance markets functioning in Russian regions, and reveals possibilities to manage them. Objectives. The purpose of the study is to substantiate regional factors that determine the specifics of regional insurance market development; to quantify them to increase the efficiency of regional insurance. Methods. The study draws on statistical methods, functional analysis, algorithm development, correlation and regression analysis. Results. I calculated coefficients of pair and multiple correlation with the indicators of insurance markets in the context of the subjects of the Russian Federation, and composed regression equations. Based on the analysis, I determined the algorithm for inverse effect of the insurance market on the economic, social, fiscal and environmental performance of the region, offered appropriate measures aimed at developing the economic potential of the region and its social sphere. Conclusions. The paper considers the case of the Republic of Khakassia, one of depressed subjects in the Siberian Federal District. The developed models can be used for other regions of Russia, given the geographical and economic features of development. The findings may help generate regional strategies for socio-economic development at the country level. The scientific contribution and the novelty of the work consist of systematizing and quantifying the factors affecting the insurance mechanisms of regional markets, and assessing the inverse effect of insurance mechanisms on integrated development of the region.

Tools for Investing in the “Green” Economy: World Experience and Prospects in Russia

2020 ◽  
pp. 46-50
Author(s):  
N.I. Chovgan ◽  
◽  
O.S. Akupiyan ◽  
Keyword(s):  
Financial Market ◽  
Financial Institutions ◽  
Capital Market ◽  
Capital Flows ◽  
Green Economy ◽  
Financial Resources ◽  
Insurance Markets ◽  
Market Mechanisms ◽  
Research Areas ◽  
Reproduction Process

The development of the modern capital market and innovative technologies, including in the financial sector, creates the need to expand the research areas of the reproduction process and individual mechanisms that support it. Financial institutions are constantly required participants in responsible financing. Investors’ expectations regarding investments in environmental production and technologies reorient capital flows to these areas, and schemes for attracting financial resources and distributing risks in the process of implementing the principles of sustainable development are considered as unified. The article analyzes transformations and reviews the existing experience of forming appropriate mechanisms, justifies the functioning of the most effective ones. Among the investment and financial mechanisms of the “green” economy, the most important are budget investment mechanisms and financial market mechanisms. The mechanisms of the stock, credit and insurance markets are identified as components of the financial market mechanisms.

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