IDEAS home Printed from https://ideas.repec.org/a/pal/gpprii/v50y2025i1d10.1057_s41288-024-00335-y.html
   My bibliography  Save this article

Risk attitudes towards on-demand insurance: an experimental study

Author

Listed:
  • Hsiaoyin Chang

    (University of St. Gallen)

  • Hato Schmeiser

    (University of St. Gallen)

Abstract

On-demand insurance products cover risks for short periods of time via a smartphone or other electronic device. Such insurance contracts give policyholders the freedom to choose when to be insured in a flexible way. On-demand contracts may change the way risk is perceived. Therefore, we conduct an experiment and show that individuals can become exceptionally risk-averse when offered short-term insurance. We show two main reasons for this result: first, the underlying risk is often overestimated by the subjects due to a miscalculation of the loss probabilities. Second, the shorter valuation horizon of on-demand insurance contracts leads to myopic loss aversion.

Suggested Citation

  • Hsiaoyin Chang & Hato Schmeiser, 2025. "Risk attitudes towards on-demand insurance: an experimental study," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 50(1), pages 106-141, January.
    • Handle: RePEc:pal:gpprii:v:50:y:2025:i:1:d:10.1057_s41288-024-00335-y
    DOI: 10.1057/s41288-024-00335-y
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41288-024-00335-y
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/s41288-024-00335-y?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:gpprii:v:50:y:2025:i:1:d:10.1057_s41288-024-00335-y. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.