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Mandatory unisex policies and annuity pricing : quasi-experimental evidence from Germany

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  • Gaudecker, Hans-Martin von
  • Weber, Carsten

Abstract

We analyse the effect of abolishing gender-based categorisation of risks on the pricing of annuity contracts. Under the absence of screening activities, we find clear evidence of insurers expecting strong adverse selection effects. In particular, most of the unisex contracts’ payouts closely resemble those from women’s policies before the reform. Hence the policy target is not met and there are large efficiency losses for men. We conclude that there seems to be little hope for unisex policies to meet their equity objectives if consumers can react on the extensive margin, unless subsidies are extremely large.

Suggested Citation

  • Gaudecker, Hans-Martin von & Weber, Carsten, 2006. "Mandatory unisex policies and annuity pricing : quasi-experimental evidence from Germany," Papers 07-07, Sonderforschungsbreich 504.
    • Handle: RePEc:mnh:spaper:2560
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    File URL: https://madoc.bib.uni-mannheim.de/2560/1/dp07_07.pdf
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    References listed on IDEAS

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    1. Thomas Buchmueller & John Dinardo, 2002. "Did Community Rating Induce an Adverse Selection Death Spiral? Evidence from New York, Pennsylvania, and Connecticut," American Economic Review, American Economic Association, vol. 92(1), pages 280-294, March.
    2. Axel Boersch-Supan & Christina B. Wilke, 2004. "The German Public Pension System: How it Was, How it Will Be," NBER Working Papers 10525, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Bruszas, Sandy & Kaschützke, Barbara & Maurer, Raimond & Siegelin, Ivonne, 2018. "Unisex pricing of German participating life annuities—Boon or bane for customer and insurance company?," Insurance: Mathematics and Economics, Elsevier, vol. 78(C), pages 230-245.
    2. Bucher-Koenen, Tabea & Kluth, Sebastian, 2013. "Subjective Life Expectancy and Private Pensions," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79806, Verein für Socialpolitik / German Economic Association.
    3. repec:mea:meawpa:12265 is not listed on IDEAS

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