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.
| Author: | Neil A. Doherty, Christian LauxORCiDGND, Alexander Muermann |
|---|---|
| URN: | urn:nbn:de:hebis:30:3-241157 |
| Parent Title (German): | Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2011,31 |
| 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 |
| Year of Completion: | 2011 |
| Year of first Publication: | 2011 |
| Publishing Institution: | Universitätsbibliothek Johann Christian Senckenberg |
| Release Date: | 2012/02/07 |
| Tag: | Deductible Insurance; Implicit Insurance Contracts; Insurance Brokers; Upper Limit |
| Issue: | Version November 2011 |
| Page Number: | 39 |
| HeBIS-PPN: | 312315651 |
| Institutes: | Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS) |
| Licence (German): |  Deutsches Urheberrecht |
