Advanced Search
MyIDEAS: Login to save this paper or follow this series

Does private information affect the insurance risk? Evidence from the automobile insurance market

Contents:

Author Info

  • Arvidsson, Sara

    ()
    (VTI)

Registered author(s):

    Abstract

    This paper empirically investigates the effect of policyholders’ private information about risky traffic behavior on automobile insurance coverage and ex post risk. It combines insurance company information with the policyholders’ private information on risky traffic behavior (traffic violations) that is not accessible to the insurance company. It is demonstrated that being unable to reject the null of zero correlation is not consistent with symmetric information in the automobile insurance market. A positive significant correlation for three out of ten groups of new policyholders is found, consistent with the adverse selection/moral hazard prediction. Besides, private information about risky traffic behavior increases ex post risk while it both increases and reduces the demand for extensive insurance. Our conclusion is that the ambiguity of previous findings in the automobile insurance market may be explained by that high risks have different demand for extensive insurance coverage.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.transportportal.se/SWoPEc/Essay_1_Arvidsson_Does_private_information.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by Swedish National Road & Transport Research Institute (VTI) in its series Working Papers with number 2010:1.

    as in new window
    Length: 56 pages
    Date of creation: 12 Jan 2010
    Date of revision: 03 Feb 2011
    Handle: RePEc:hhs:vtiwps:2010_001

    Contact details of provider:
    Postal: VTI, Transport Economics, P.O. Box 6056, SE-171 06 Solna, Sweden
    Phone: +46-13-20 40 00
    Fax: +46-13-14 14 36
    Email:
    Web page: http://www.vti.se/tek
    More information through EDIRC

    Related research

    Keywords: Adverse selection; Moral hazard; Propitious selection; Insurance;

    Find related papers by JEL classification:

    This paper has been announced in the following NEP Reports:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:hhs:vtiwps:2010_001. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mats Berggren).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.