Risk classification with on-demand insurance

被引:5
作者
Braun, Alexander [1 ,3 ]
Haeusle, Niklas [1 ,3 ]
Thistle, Paul [2 ]
机构
[1] Univ St Gallen, Inst Insurance Econ, St Gallen, Switzerland
[2] Univ Nevada, Dept Finance, Las Vegas, NV USA
[3] Univ St Gallen, Inst Insurance Econ, IVW HSG, St Gallen, Switzerland
关键词
adverse selection; on-demand insurance; risk classification; screening; CATEGORICAL DISCRIMINATION; MARKETS; EFFICIENCY;
D O I
10.1111/jori.12429
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
On-demand insurance is an innovative business model from the InsurTech space, which provides coverage for episodic risks. It makes use of a simple fact in a practical way: People differ in their frequency of exposure as well as the probability of loss. The extra dimension of heterogeneity can be used to screen the insured and shifts the utility-possibility frontier outward. We provide a sufficient condition under which type-specific full insurance at the actuarially fair price is incentive compatible. We also show that our results hold for various real-world implementations of on-demand insurance.
引用
收藏
页码:975 / 990
页数:16
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