Insuring non-verifiable losses

Insurance contracts are often complex and difficult to verify outside the insurance relation. We show that standard one-period insurance policies with an upper limit and a deductible are the optimal incentive-compatible contracts in a competitive market with repeated interaction. Optimal group insurance policies involve a joint upper limit but individual deductibles and insurance brokers can play a role implementing such contracts for the group of clients. Our model provides new insights and predictions about the determinants of insurance.

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Metadaten
Author:Neil A. Doherty, Christian Laux, Alexander Muermann
URN:urn:nbn:de:hebis:30:3-241157
Series (Serial Number)CFS working paper series (2011, 31)
Publisher:Goethe-Univ., House of Finance, Center for Financial Studies
Place of publication:Frankfurt am Main
Document Type:Working Paper
Language:English
Date of Publication (online):07.02.2012
Year of first Publication:2011
Publishing Institution:Univ.-Bibliothek Frankfurt am Main
Tag:Deductible Insurance; Implicit Insurance Contracts; Insurance Brokers; Upper Limit
Pagenumber:35
HeBIS PPN:312315651
Institutes:Center for Financial Studies (CFS)
Dewey Decimal Classification:332 Finanzwirtschaft
JEL-Classification:G22 Insurance; Insurance Companies
L14 Transactional Relationships; Contracts and Reputation; Networks
D68
Licence (German):License Logo Veröffentlichungsvertrag für Publikationen ohne Print on Demand

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