Hao, MingJie, Tapadar, Pradip, Thomas, R. Guy (2015) Loss coverage in insurance markets: why adverse selection is not always a bad thing. In: International Actuarial Association Colloquium, 7-10 June 2015, Oslo, Norway. (KAR id:64112)
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Official URL http://www.actuaries.org/oslo2015/papers/IAALS-Hao... |
Abstract
This paper investigates equilibrium in an insurance market where risk classification is restricted. Insurance demand is characterised by an iso-elastic function with a single elasticity
by insurance. We find that equilibrium premium and adverse selection increase monotonically with demand elasticity, but loss coverage first increases and then decreases. We argue that
loss coverage represents the efficacy of insurance for the whole population; and therefore, if demand elasticity is sufficiently low, adverse selection is not always a bad thing.
Item Type: | Conference or workshop item (Paper) |
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Subjects: | Q Science > QA Mathematics (inc Computing science) |
Divisions: | Divisions > Division of Computing, Engineering and Mathematical Sciences > School of Mathematics, Statistics and Actuarial Science |
Depositing User: | Pradip Tapadar |
Date Deposited: | 20 Oct 2017 20:52 UTC |
Last Modified: | 16 Feb 2021 13:49 UTC |
Resource URI: | https://kar.kent.ac.uk/id/eprint/64112 (The current URI for this page, for reference purposes) |
Tapadar, Pradip: | ![]() |
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