The interplay between risk adjustment and risk rating in voluntary health insurance

Many regulated health insurance markets include risk adjustment (aka risk equalization) to mitigate selection incentives for insurers. Empirical studies on the design and evaluation of risk-adjustment algorithms typically focus on mandatory health insurance schemes. This paper considers risk adjustment in the context of voluntary health insurance, as found in Chile, Ireland, and Australia. In addition to the challenge of mitigating selection by insurers, regulators of these voluntary schemes have to deal with selection by consumers in and out of the market. A strategy for mitigating selection by consumers is to apply some form of risk rating. Our paper shows how risk adjustment and risk rating interact: (1) risk rating reduces the need for risk adjustment and (2) risk adjustment reduces premium variation across rating factors, thereby increasing incentives for consumers to select in and out of the market.     

我国商业医疗保险中的道德风险及对策

医疗行为的信息不对称以及疾病的客观性、严重性、复杂性、多样性等本质特征导致医疗保险成为道德风险发生频率最高、造成损失最大、又最难以有效规避风险的险种。道德风险是医疗保险市场失灵的重要表现。本文通过分析我国医疗保险市场逆选择和事后道德风险的不同形成原因,以期探讨有效的风险控制方法,从而降低商业医疗保险的经营风险,为促进其合理发展并最终满足居民更全面的健康需求提供帮助。     

民以食为天:关于农业保险研究的一个文献综述

本文对有关农业保险的中外历史文献进行了全面回顾,并在此基础上评估和回答了可能会影响中国农业保险试验的若干问题:第一,为什么会有农业保险?第二,农业保险市场为什么会失灵?为什么各国政府都对农业保险大加补贴?而农民对待农业保险又会有怎样的反应?第三,既然农业保险产品设计的核心问题是费率厘定,那么有关此项的研究有哪些进展?第四,中国政府在发展农业保险的过程中,尤其需要注意哪些事项?本文的目的在于,提醒各级政府部门要积极参与农业保险试点,认真解决试点过程中发现的各种问题,立足长远,真正建立起农业保险这个褔惠三农的风险保障机制。     

The Econometrics of Risk Classification in Insurance

We present in this article some questions related to risk classification. These are discussed depending on the information used—either data on conditional characteristics or also including data on claim histories or on endogenous insurance demand by the agents.     

Risk selection in the London political risk insurance market: the role of tacit knowledge,trust and heuristics

This study demonstrates that the basis of decision-making and risk selection in the London Political Risk Insurance (PRI) market is a combination of Art and Science with such factors as trust and reputation playing an important role. The study breaks new ground by uncovering and examining different methods and strategies of political risk underwriting employed in the insurance market, which does not rely on statistical tools as seen in more traditional insurance types. Adopting a grounded theory approach, the data was generated through 14 semi-structured and unstructured interviews conducted with PRI experts from five PRI companies and two leading political risk broking houses. The data also included documentation reviews and observations.     

论存款保险制度下的风险防范

存款保险制度是一种金融保障制度。建立存款保险制度有利于降低金融风险,防止挤兑发生及危机扩散。当个别银行出现流动性风险时,存款人因为有了相关的法律制度作保证,不再产生巨大的恐惧心理,能避免发生挤兑风潮。同时,建立存款保险制度有利于保护存款人的利益。在投保银行面临支付危机时提供救助,在投保银行破产倒闭时依法清偿存款人的存款,从而保护了存款人的利益。     

Automobile Insurance Contracts and Risk of Accident: An Empirical Test Using French Individual Data

Insurance has for a long time been perceived as a way of transferring responsibility from insured agents to insurers and thus as potentially influencing insured agents' behavior. Two particular opportunistic behaviors have been analyzed. First, the theory of adverse selection predicts that high-risk agents are likely to demand more insurance than are low-risk agents. Second, the theory of moral hazard predicts that the wider the insurance coverage, the less agents will try to prevent accidents. Both theories thus conclude that agents who are totally insured should have a higher probability of accident than those with only partial insurance, ceteris paribus. Nevertheless, one of the aims of insurance rating systems is to control for these opportunistic behaviors. In this article, we use individual data to see if the French automobile insurance rating system has achieved this aim. We do this using a two-step maximum-likelihood method. First, we compute a probit model to estimate the probability of taking out comprehensive versus third-party insurance. We then calculate the generalized residual, which is included as an independent variable in a negative binomial model estimating the probability of having an accident. The coefficient of this variable is argued to represent adverse selection and ex-ante moral-hazard behavior.     

保险资金投资保障性住房的风险管理探讨

为解决中低收入阶层住房难问题,2011年进一步加大了保障性住房建设的力度。资金是保障性住房建设的一个瓶颈问题,本文对保障性住房的政策、建设情况和存在问题进行了分析,结合保险资金的性质与特点,提出保险资金投资保障性住房是一条安全、稳健的运用渠道。对保险机构来说,只有关注并管理好政策风险、投资风险和管理风险,才能获得经济效...     

风险分类对保险市场效率的影响分析

本文将社会福利作为衡量保险市场效率的标准,分析保险人的风险分类行为是否有助于信息不对称保险市场效率的提高.本文首先证明了信息不对称保险市场存在市场失灵,然后比较了实施风险分类前后社会福利的差异.结论表明:当保险市场处于R-S均衡时,准确性较高的分类能使社会福利得到改进,准确性不高的分类不能使社会福利得到改进;当保险市场...     

Public Versus Private Insurance with Dual Theory: A Political Economy Argument

This paper analyzes the political support for public insurance in the presence of a private insurance alternative. The public insurance is compulsory and offers a uniform insurance policy. The private insurance is voluntary and can offer different insurance policies. Adopting Yaari's [Econometrica, 55, 95–115, 1987] dual theory to expected utility (i.e., risk aversion without diminishing marginal utility of income), we show that adverse selection on the private insurance market may lead a majority of individuals to prefer public insurance over private insurance, even if the median risk is below the average risk (so that the median actually subsidizes high-risk individuals). We also show that risk aversion makes public insurance more attractive and that the dual theory is less favourable to a mixed insurance system than the expected utility framework. Lastly, we demonstrate how the use of genetic tests may threaten the political viability of public insurance.     

Cybersecurity insurance and risk-sharing

In today’s interconnected digital world, cybersecurity risks and resulting breaches are a fundamental concern to organizations and public policy setters. Accounting firms, as well as other firms providing risk advisory services, are concerned about their clients’ potential and actual breaches. Organizations cannot, however, eliminate all cybersecurity risks so as to achieve 100% security. Furthermore, at some point additional cybersecurity measures become more costly than the benefits from the incremental security. Thus, those responsible for preventing cybersecurity breaches within their organizations, as well as those providing risk advisory services to those organizations, need to think in terms of the cost-benefit aspects of cybersecurity investments. Besides investing in activities that prevent or mitigate the negative effects of cybersecurity breaches, organizations can invest in cybersecurity insurance as means of transferring some of the cybersecurity risks associated with potential future breaches.This paper provides a model for selecting the optimal set of cybersecurity insurance policies by a firm, given a finite number of policies being offered by one or more insurance companies. The optimal set of policies for the firm determined by this selection model can (and often does) contain at least three areas of possible losses not covered by the selected policies (called the Non-Coverage areas in this paper). By considering sets of insurance policies with three or more Non-Coverage areas, we show that a firm is often better able to address the frequently cited problems of high deductibles and low ceilings common in today’s cybersecurity insurance marketplace. Our selection model facilitates improved risk-sharing among cybersecurity insurance purchasers and sellers. As such, our model provides a basis for a more efficient cybersecurity insurance marketplace than currently exists. Our model is developed from the perspective of a firm purchasing the insurance policies (or the risk advisors guiding the firm) and assumes the firm’s objective in purchasing cybersecurity insurance is to minimize the sum of the costs of the premiums associated with the cybersecurity insurance policies selected and the sum of the expected losses not covered by the insurance policies.     

Risk Classification by Fuzzy Inference

Traditionally, policyholders in life insurance are classified in simple mortality tables, most often according to only a few risk characteristics. Instead of a risk classification according to the numerical rating system, this article describes how to classify by using a fuzzy inference methodology. By defining risk factors as fuzzy sets, it is shown that an insurer can utilize multiple prognostic factors that are imprecise and vague. The presented fuzzy risk classification provides a more realistic way of modeling mortality risks since it allows for compensations and interactions between multiple risk factors.     

Why firms purchase property insurance

We investigate whether corporate finance incentives affect the extent of corporate hedging with property insurance. Using a database that contains detailed insurance information, we document a positive relation between the expected costs of distress and property insurance coverage. We also show that the dividend payout ratio is negatively associated with property insurance coverage, consistent with the view that firms with high payout ratios insure a smaller fraction of properties due to cash flows in excess of investment needs, easy access to capital markets, or both. Different incentives are important for the insurance deductible and limit of coverage, and the deductible and limit of coverage are substitutes.     

Redistributive taxation and social insurance under adverse selection in the insurance market

This paper extends the analysis of optimal income taxation under uncertainty studied by Cremer and Pestieau (International Tax and Public Finance, 3, 281–295, 1996). We introduce asymmetric information in the insurance market whereby private insurance companies cannot identify the risk probability of the agents, and we examine its effect on public policy. We consider the separating equilibrium of Rothschild and Stiglitz (Quarterly Journal of Economics, 90, 629–649, 1976) and Riley (Econometrica, 47, 331–359, 1979) where the low risk agent is only partially insured. The presence of the distortion in the insurance market changes the affinity of labor, and in some cases, we show that the scope of redistribution and the resulting social welfare are higher under asymmetric information than under full information. We also show that the increase in social insurance affects the utility and labor incentive of the low risk type by relaxing the self-selection constraint in the insurance market. The policy implications of the redistributive taxation and social insurance are analytically and numerically examined.      

保险市场逆向选择与顺向选择共存研究

保险市场存在着逆向选择。经典逆向选择模型认为,风险高的人会购买更多的保险,但大多数实证研究表明保险市场还存在顺向选择。本文认为,逆向选择和顺向选择虽然对立,但共存于保险市场,在此基础上构建保险市场均衡模型,并进行了仿真研究。     

Features selection,data mining and finacial risk classification: a comparative study

The aim of this paper is to compare several predictive models that combine features selection techniques with data mining classifiers in the context of credit risk assessment in terms of accuracy, sensitivity and specificity statistics. The t‐statistic, Battacharrayia statistic, the area between the receiver operating characteristic, Wilcoxon statistic, relative entropy, and genetic algorithms were used for the features selection task. The selected features are used to train the support vector machine (SVM) classifier, backpropagation neural network, radial basis function neural network, linear discriminant analysis and naive Bayes classifier. Results from three datasets using a 10‐fold cross‐validation technique showed that the SVM provides the best accuracy under all features selections techniques adopted in the study for all three datasets. Therefore, the SVM is an attractive classifier to be used in real applications for bankruptcy prediction in corporate finance and financial risk management in financial institutions. In addition, we found that our best results are superior to earlier studies on the same datasets.     

Coalition-Proof Allocations in Adverse-Selection Economies

We reexamine the canonical adverse selection insurance economy first studied by Rothschild and Stiglitz [1976]. We define blocking in a way that takes private information into account and define a coalition-proof correspondence as a mapping from coalitions to allocations with the property that allocations are in the correspondence, if and only if, they are not blocked by any other allocations in the correspondence for any subcoalition. We prove that the Miyazaki allocation—the Pareto-optimal allocation (possibly cross-subsidized) most preferred by low-risk agents—is coalition-proof.     

从保险消费观视角分析我国保险业的发展

对正确保险消费观的研究,不仅对我国保险消费者的消费行为具有重要的指导意义,而且对于完善我国保险市场,实现我国保险业的科学发展亦有十分重要的作用。正确保险消费观,是以风险转移为先,以购买经济保障为本,以互助共济为己任,以最大诚信为最高准则,以保险作为生存必须品,以可持续消费为目标的保险消费理念体系。保险保障形式是整个保障体系中最普遍、最经常、最基础和最重要的防灾救灾形式,它和社会保障共同处于整个防灾救灾体系的基础地位。     

论环境责任保险中政府的作用

环境的负外部性是造成环境污染的重要原因,环境责任保险是通过责任风险社会化解决环境污染损害赔偿问题的有效方式之一。但在现阶段,要发展环境责任保险只能依靠政府强制的力量,本文结合我国现状,分析了政府在推动环境责任保险发展中应发挥的作用。     

A Value at Risk Approach to Background Risk

This paper studies the effects of an uninsurable background risk (BR) on the demand for insurance (proportional and with deductible). We study both the case of BR uncorrelated with the insurable one and the perfectly correlated one, in a Gaussian world. In order to perform our study, we exploit the new risk measure known as Value at Risk (VaR) and consider insurance contracts which are Mean-VaR efficient. We obtain results which depend on the parameters (moments) of both risks and on the magnitude of loadings charged by the insurance company, instead of depending on the risk attitudes of the insured, such as risk aversion and prudence.We demonstrate that, if loadings are not too high, the demand for insurance increases with positively correlated BR; it decreases with BR negatively correlated if the latter is less risky than the insurable one (in this case it can even go to zero, if loadings are too high); it goes to zero with BR which is negatively correlated and more risky than the insurable one.