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Private information in life insurance, annuity and health insurance markets

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  • Wuppermann, A.C.

Abstract

Economic theory predicts that private information on risks in insurance markets leads to adverse selection. To counterbalance private information insurers collect and use information on applicants to assess their risk and calculate premiums in an underwriting process. Using data from the English Longitudinal Study of Ageing (ELSA) this paper documents that di erences in the information used in underwriting across life insurance, annuity and health insurance markets attenuate private information to di erent extents. The results are in line with - and might help to reconcile - the mixed empirical evidence on adverse selection across these markets.

Suggested Citation

  • Wuppermann, A.C., 2014. "Private information in life insurance, annuity and health insurance markets," Health, Econometrics and Data Group (HEDG) Working Papers 14/15, HEDG, c/o Department of Economics, University of York.
  • Handle: RePEc:yor:hectdg:14/15
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    References listed on IDEAS

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    Cited by:

    1. Lambregts, Timo R. & Schut, Frederik T., 2020. "Displaced, disliked and misunderstood: A systematic review of the reasons for low uptake of long-term care insurance and life annuities," The Journal of the Economics of Ageing, Elsevier, vol. 17(C).
    2. Werding, Martin & Schaffranka, Claudia & Nöh, Lukas & Lembcke, Franziska, 2023. "Ergänzende Kapitaldeckung der Altersvorsorge: Gründe, Gestaltungsoptionen und Auswirkungen," Working Papers 02/2023, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung.

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    More about this item

    Keywords

    ELSA; private information; health-related risks; insurance; biomarkers;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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