The Effect of Regulation on Insurance Pricing: The Case of Germany |
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| Authors: | Thomas R. Berry‐Stölzle Patricia Born |
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| Affiliation: | 1. Thomas R. Berry‐St?lzle is at the Terry College of Business, University of Georgia;2. Patricia Born is at the Department of Risk Management/Insurance, Real Estate & Business Law, Florida State University. |
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| Abstract: | This article analyzes the impact of policy form regulation on the unit price of insurance and determinants of premium changes using the 1994 deregulation of the German property–liability market as a natural experiment. Our result show that policy form regulation did not increase prices above competitive levels. Factors influencing premium changes are significantly different for the two time periods, pre‐ and post‐deregulation, indicating that regulation affects insurance pricing. Focusing on highly competitive lines after deregulation, we find a significant price decrease, and this decrease is offset by higher prices in the remaining other lines. |
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