Who is Changing Health Insurance Coverage? Empirical Evidence on Policyholder Dynamics
AbstractLong-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.
Download InfoIf 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.
Bibliographic InfoPaper provided by University of St. Gallen, School of Finance in its series Working Papers on Finance with number 1223.
Length: 26 pages
Date of creation: Dec 2012
Date of revision:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Thomas Davidoff, 2009. "Housing, Health, and Annuities," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 76(1), pages 31-52.
- Pauly, Mark V & Kunreuther, Howard & Hirth, Richard, 1995. "Guaranteed Renewability in Insurance," Journal of Risk and Uncertainty, Springer, vol. 10(2), pages 143-56, March.
- Jean Pinquet & Montserrat Guillén & Mercedes Ayuso, 2011.
"Commitment and Lapse Behavior in Long‐Term Insurance: A Case Study,"
Journal of Risk & Insurance,
The American Risk and Insurance Association, vol. 78(4), pages 983-1002, December.
- Jean Pinquet & Montserrat Guillén & Mercedes Ayuso, 2011. "Commitment and Lapse Behavior in Long-Term Insurance: A Case Study," Post-Print hal-00374303, HAL.
- Strombom, Bruce A. & Buchmueller, Thomas C. & Feldstein, Paul J., 2002. "Switching costs, price sensitivity and health plan choice," Journal of Health Economics, Elsevier, vol. 21(1), pages 89-116, January.
- Cutler, David & Lincoln, Bryan & Zeckhauser, Richard, 2009.
"Selection Stories: Understanding Movement across Health Plans,"
Working Paper Series
rwp09-022, Harvard University, John F. Kennedy School of Government.
- Cutler, David & Lincoln, Bryan & Zeckhauser, Richard, 2010. "Selection stories: Understanding movement across health plans," Journal of Health Economics, Elsevier, vol. 29(6), pages 821-838, December.
- David M. Cutler & Bryan Lincoln & Richard J. Zeckhauser, 2009. "Selection Stories: Understanding Movement Across Health Plans," NBER Working Papers 15164, National Bureau of Economic Research, Inc.
- Zeckhauser, Richard Jay & Cutler, David M. & Lincoln, Bryan, 2009. "Selection Stories: Understanding Movement Across Health Plans," Scholarly Articles 4449102, Harvard Kennedy School of Government.
- Crocker, Keith J & Moran, John R, 2003. " Contracting with Limited Commitment: Evidence from Employment-Based Health Insurance Contracts," RAND Journal of Economics, The RAND Corporation, vol. 34(4), pages 694-718, Winter.
- Eckardt, Martina & Räthke-Döppner, Solvig, 2008.
"The Quality of Insurance Intermediary Services – Empirical Evidence for Germany,"
10703, University Library of Munich, Germany.
- Martina Eckardt & Solvig Räthke-Döppner, 2010. "The Quality of Insurance Intermediary Services-Empirical Evidence for Germany," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 77(3), pages 667-701.
- Morin, Roger A & Fernandez Suarez, Antonio, 1983. " Risk Aversion Revisited," Journal of Finance, American Finance Association, vol. 38(4), pages 1201-16, September.
- Cochrane, John H, 1995. "Time-Consistent Health Insurance," Journal of Political Economy, University of Chicago Press, vol. 103(3), pages 445-73, June.
- Lucinda Trigo-Gamarra, 2008. "Reasons for the Coexistence of Different Distribution Channels: An Empirical Test for the German Insurance Market," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan, vol. 33(3), pages 389-407, July.
- van den Berg, Bernard & Van Dommelen, Paula & Stam, Piet & Laske-Aldershof, Trea & Buchmueller, Tom & Schut, Frederik T., 2008. "Preferences and choices for care and health insurance," Social Science & Medicine, Elsevier, vol. 66(12), pages 2448-2459, June.
- Igal Hendel & Alessandro Lizzeri, 2003.
"The Role Of Commitment In Dynamic Contracts: Evidence From Life Insurance,"
The Quarterly Journal of Economics,
MIT Press, vol. 118(1), pages 299-327, February.
- Igal Hendel & Alessandro Lizzeri, 2000. "The Role of Commitment in Dynamic Contracts: Evidence from Life Insurance," NBER Working Papers 7470, National Bureau of Economic Research, Inc.
- Rothschild, Michael & Stiglitz, Joseph E, 1976. "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information," The Quarterly Journal of Economics, MIT Press, vol. 90(4), pages 630-49, November.
- Buchmueller, Thomas C. & Feldstein, Paul J., 1997. "The effect of price on switching among health plans," Journal of Health Economics, Elsevier, vol. 16(2), pages 231-247, April.
- David M. Cutler & Sarah Reber, 1996.
"Paying for Health Insurance: The Tradeoff between Competition and Adverse Selection,"
NBER Working Papers
5796, National Bureau of Economic Research, Inc.
- David M. Cutler & Sarah J. Reber, 1998. "Paying For Health Insurance: The Trade-Off Between Competition And Adverse Selection," The Quarterly Journal of Economics, MIT Press, vol. 113(2), pages 433-466, May.
- Weiyu Kuo & Chenghsien Tsai & Wei-Kuang Chen, 2003. "An Empirical Study on the Lapse Rate: The Cointegration Approach," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 70(3), pages 489-508.
- Roger Feldman & Michael Finch & Bryan Dowd & Steven Cassou, 1989. "The Demand for Employment-Based Health Insurance Plans," Journal of Human Resources, University of Wisconsin Press, vol. 24(1), pages 115-142.
- Goldman, Dana & Leibowitz, Arleen & Robalino, David, 2004. "Employee Responses to Health Insurance Premium Increases," MPRA Paper 12004, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Geraldine Frei).
If references are entirely missing, you can add them using this form.