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Loss Coverage: Why Insurance Works Better with Some Adverse Selection

Thomas, R. Guy (2017) Loss Coverage: Why Insurance Works Better with Some Adverse Selection. In: Actuarial Teachers and Researchers Conference, 17-18 July 2017, Canterbury. (Unpublished) (KAR id:65183)

Abstract

Insurers typically argue that regulatory limits on risk classification will induce ‘adverse selection’; they say that this has disadvantages not just for insurers, but also for society as a whole. I argue that even on its own terms, this argument is often flawed. From the viewpoint of society as a whole, not all adverse selection is adverse. Limits on risk classification which induce the right amount of adverse selection (but not too much adverse selection) can increase ‘loss coverage’, and so make insurance work better for society as a whole.

Item Type: Conference or workshop item (Keynote)
Uncontrolled keywords: insurance; loss coverage; adverse selection; risk classification
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HG Finance
Divisions: Divisions > Division of Computing, Engineering and Mathematical Sciences > School of Mathematics, Statistics and Actuarial Science
Depositing User: Guy Thomas
Date Deposited: 10 Dec 2017 23:30 UTC
Last Modified: 16 Feb 2021 13:51 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/65183 (The current URI for this page, for reference purposes)
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