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Complete vs. Incomplete Insurance Contracts under Adverse Selection with multiple Risks




Cet article généralise l'analyse standard de l'antisélection dans un marché d'assurance concurrentiel, laquelle suppose une source unique de risque, au cas où les individus sont exposés à des risques multiples. Nous comparons le cas où les assureurs peuvent offrir des contrats d'assurance multirisques (contrats complets) et le cas où différents risques relèvent de contrats indépendants (contrats incomplets). Pour les contrats monorisque, nous prenons en compte la possibilité que l'assureur d'un risque particulier ait ou n'ait pas une information parfaite sur la couverture d'assurance de son client à l'égard des autres sources de risque. Notre analyse met l'accent sur le rôle que joue la corrélation des caractéristiques d'exposition au risque dans un contexte de tamisage multidimensionnel. À l'équilibre, lorsque le marché est en mesure d'exploiter cette corrélation, les bons risques à l'égard d'une certaine source de risque n'obtiennent pas nécessairement une assurance partielle contre le risque en question. This paper extends the standard adverse selection model for competitive insurance markets, which assumes a single source of risk, to the case where individuals are subject to multiple risks. We compare the following market situations: the case where insurers can offer comprehensive policies against all sources of risk (complete contrats) and the case where different risks are covered by separate policies (incomplete contracts). In the latter case, we consider whether or not the insurer of a particular risk has perfect information regarding an individual's coverage against other sources of risks. The analysis emphasizes the informational role of bundling in multidimensional screening. When the market situation allows bundling, it is shown that in equilibrium the low-risk type with respect to a particular source of risk does not necessarily obtain partial coverage against that particular risk.

Suggested Citation

  • Claude Fluet & François Pannequin, 1996. "Complete vs. Incomplete Insurance Contracts under Adverse Selection with multiple Risks," Cahiers de recherche du Département des sciences économiques, UQAM 9601, Université du Québec à Montréal, Département des sciences économiques.
  • Handle: RePEc:cre:uqamwp:9601
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    Cited by:

    1. Georges Dionne & Nathalie Fombaron & Neil Doherty, 2012. "Adverse Selection in Insurance Contracting," Cahiers de recherche 1231, CIRPEE.
    2. Maarten C. W. Janssen & Vladimir A. Karamychev, 2008. "On Bundling in Insurance Markets," Vienna Economics Papers 0809, University of Vienna, Department of Economics.

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