Estimating the Effect of a Change in Insurance Pricing Regime on Accidents with Endogenous Mobility
AbstractIn this paper, we estimate the impact of introducing a bonus-malus system on the probability of having automobile accidents, taking into account contract duration or the client mobility between insurers. We show that the new incentive scheme reduces accident rates of all policyholders when contract duration is taken into account, but does not affect accident rates of movers that shirk the imposed incentive effects of the new insurance pricing scheme.
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Bibliographic InfoPaper provided by CIRPEE in its series Cahiers de recherche with number 0728.
Date of creation: 2007
Date of revision:
Bonus-malus; contract duration; automobile accident; Poisson distribution; right- and left-censoring; exponential distribution;
Other versions of this item:
- Georges Dionne & Benoit Dostie, 2007. "Estimating the effect of a change in insurance pricing regime on accidents with endogenous mobility," Cahiers de recherche 07-11, HEC Montréal, Institut d'économie appliquée.
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
- J29 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Other
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
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