Journal article
Yes, No, Perhaps? Premium Risk and Guaranteed Renewable Insurance Contracts With Heterogeneous Incomplete Private Information
The Journal of risk and insurance, Vol.83(2), pp.363-385
06/01/2016
DOI: 10.1111/jori.12064
Abstract
The article shows that heterogeneous incomplete private information can explain the limited existence of guaranteed renewable health insurance (GR) contracts in an otherwise frictionless markets. We derive a unique equilibrium that can be of the form that either only a portion of the population or none will cover themselves against premium risk with a GR contract. Increased risk aversion, increased premium risk, and first-order stochastic improvements of the distribution of private information increase the likelihood of positive take-up. In case GR contracts are in demand, increased risk aversion and first-order stochastic improvements of the distribution of private information lead to more individuals purchasing the GR contract.
Details
- Title: Subtitle
- Yes, No, Perhaps? Premium Risk and Guaranteed Renewable Insurance Contracts With Heterogeneous Incomplete Private Information
- Creators
- Richard Peter - Ludwig-Maximilians-Universität MünchenAndreas Richter - Ludwig-Maximilians-Universität MünchenPetra Steinorth - St. John's University
- Resource Type
- Journal article
- Publication Details
- The Journal of risk and insurance, Vol.83(2), pp.363-385
- DOI
- 10.1111/jori.12064
- ISSN
- 0022-4367
- eISSN
- 1539-6975
- Publisher
- Wiley
- Number of pages
- 23
- Language
- English
- Date published
- 06/01/2016
- Academic Unit
- Finance
- Record Identifier
- 9984380436502771
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