The Models of Insurance Contracts under Symmetric and Asymmetric Information and Their Premium Characteristics

In this paper, the models of optimal insurance contracts are constructed on symmetric and asymmetric information by the fundamental pricing principles in actuarial theory Some properties and premium characteristics of the optimal insurance contracts are researched. One model illustrates that the optimal policies can produce Pareto optimal risk sharing between the insurer and the insured under symmetric information, and some forms of the policies are given. Under asymmetric information, the another model shows that the optimal policies are partial insurance coverage due to the existence of moral hazard, and have the defensive function against the moral hazard form the insured. At the last of the paper, a sufficient condition of the monotone increasing about claim size is yielded.