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Who is Changing Health Insurance Coverage? Empirical Evidence on Policyholder Dynamics

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  • Christiansen, Marcus
  • Eling, Martin
  • Schmidt, Jan-Philipp
  • Zirkelbach, Lorenz

Abstract

Long-term health insurance contracts provide policyholders with the option of lapsing coverage or switching to another tariff within the same insurance company. We empirically analyze policyholder behavior regarding contract commitment in a large dataset of German private health insurance contracts. We show that short-term as well as long-term premium development, along with premium adjustment frequency, affect lapse and tariff switch rates. Moreover, the sales channel has a strong impact on switching behavior, indicating that policyholder choice is not fully independent of sales representatives. Our results are important for risk assessment and risk management of portfolios of health insurance contracts and provide better understanding of the dynamics of policyholder behavior in health insurance.

Suggested Citation

  • Christiansen, Marcus & Eling, Martin & Schmidt, Jan-Philipp & Zirkelbach, Lorenz, 2012. "Who is Changing Health Insurance Coverage? Empirical Evidence on Policyholder Dynamics," Working Papers on Finance 1223, University of St. Gallen, School of Finance.
    • Handle: RePEc:usg:sfwpfi:2012:23
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    Cited by:

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    2. Schumacher, Heiner, 2016. "Insurance, self-control, and contract flexibility," European Economic Review, Elsevier, vol. 83(C), pages 220-232.
    3. Juan Pablo Atal & Hanming Fang & Martin Karlsson & Nicolas R. Ziebarth, 2020. "Long-Term Health Insurance: Theory Meets Evidence," PIER Working Paper Archive 20-009, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
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    5. Dalit Daily-Amir & Hansjörg Albrecher & Martin Bladt & Joël Wagner, 2019. "On Market Share Drivers in the Swiss Mandatory Health Insurance Sector," Risks, MDPI, vol. 7(4), pages 1-25, November.
    6. Pradeep Kautish & Arpita Khare & Rajesh Sharma, 2022. "Health insurance policy renewal: an exploration of reputation, performance, and affect to understand customer inertia," Journal of Marketing Analytics, Palgrave Macmillan, vol. 10(3), pages 261-278, September.
    7. Juan Pablo Atal & Hanming Fang & Martin Karlsson & Nicolas R. Ziebarth, 2020. "German Long-Term Health Insurance: Theory Meets Evidence," NBER Working Papers 26870, National Bureau of Economic Research, Inc.

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