Automobile insurance ratemaking in the presence of asymmetrical information
Automobile insurance is an example of a market where multi-period contracts are observed. This form of contract can be justified by asymmetrical information between the insurer and the insured. Insurers use risk classification together with bonus-malus systems. In this paper we show that the actual...
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| Veröffentlicht in: | Journal of applied econometrics (Chichester, England) England), 1992-04, Vol.7 (2), p.149-165 |
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| container_title | Journal of applied econometrics (Chichester, England) |
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| creator | Dionne, G. Vanasse, C. |
| description | Automobile insurance is an example of a market where multi-period contracts are observed. This form of contract can be justified by asymmetrical information between the insurer and the insured. Insurers use risk classification together with bonus-malus systems. In this paper we show that the actual methodology for the integration of these two approaches can lead to inconsistencies. We develop a statistical model that adequately integrates risk classification and experience rating. For this purpose we present Poisson and negative binomial models with regression component in order to use all available information in the estimation of accident distribution. A bonus-malus system which integrates a priori and a posteriori information on an individual basis is proposed, and insurance premium tables are derived as a function of time, past accidents and the significant variables in the regression. Statistical results were obtained from a sample of 19,013 drivers. |
| doi_str_mv | 10.1002/jae.3950070204 |
| format | Article |
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This form of contract can be justified by asymmetrical information between the insurer and the insured. Insurers use risk classification together with bonus-malus systems. In this paper we show that the actual methodology for the integration of these two approaches can lead to inconsistencies. We develop a statistical model that adequately integrates risk classification and experience rating. For this purpose we present Poisson and negative binomial models with regression component in order to use all available information in the estimation of accident distribution. A bonus-malus system which integrates a priori and a posteriori information on an individual basis is proposed, and insurance premium tables are derived as a function of time, past accidents and the significant variables in the regression. 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Appl. Econ</addtitle><description>Automobile insurance is an example of a market where multi-period contracts are observed. This form of contract can be justified by asymmetrical information between the insurer and the insured. Insurers use risk classification together with bonus-malus systems. In this paper we show that the actual methodology for the integration of these two approaches can lead to inconsistencies. We develop a statistical model that adequately integrates risk classification and experience rating. For this purpose we present Poisson and negative binomial models with regression component in order to use all available information in the estimation of accident distribution. A bonus-malus system which integrates a priori and a posteriori information on an individual basis is proposed, and insurance premium tables are derived as a function of time, past accidents and the significant variables in the regression. Statistical results were obtained from a sample of 19,013 drivers.</description><subject>Accidents</subject><subject>Asymmetric information</subject><subject>Automobile insurance</subject><subject>Automobiles</subject><subject>Binomials</subject><subject>Econometrics</subject><subject>Economic models</subject><subject>Estimators</subject><subject>Insurance industry</subject><subject>Insurance premiums</subject><subject>Insurance providers</subject><subject>Insurance rates</subject><subject>Regression analysis</subject><subject>Risk assessment</subject><subject>Statistical analysis</subject><subject>Workers compensation insurance</subject><issn>0883-7252</issn><issn>1099-1255</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>1992</creationdate><recordtype>article</recordtype><sourceid>K30</sourceid><recordid>eNqFkD1v2zAQhomgAeKmXTNlENohk9wjKYrkaDgf_QjSoS06EjR9bOVIokNKaP3vQ0NBghYIMhHH93kOh5eQEwpzCsA-bCzOuRYAEhhUB2RGQeuSMiFekRkoxUvJBDsir1PaAECdwRn5shiH0IVV02LR9GmMtndYRDtgZ2-b_lf-LIbfWGwjJtxHwRc27boOh9g42-bch9jZoQn9G3LobZvw7cN7TH5cXnxffiyvv159Wi6uS1dpWZVr4LWoHAVcCc1UZVeqEqp2vK6Rgq28Xzvh8uClX1dga0cxG6ilWnnGGD8mZ9PebQx3I6bBdE1y2La2xzAmo7hmQikhM_nuP3ITxtjn4wyjSgrKaJ2h989BlOdigWq2p-YT5WJIKaI329h0Nu4MBbPv3-T-zVP_WdCT8Cd3u3uBNp8XF_-4p5O7SUOIjy5jSgATOS6nuEkD_n2Mbbw1teRSmJ83V-aS3iy_KanMOb8HYpmgPw</recordid><startdate>199204</startdate><enddate>199204</enddate><creator>Dionne, G.</creator><creator>Vanasse, C.</creator><general>Wiley Subscription Services, Inc., A Wiley Company</general><general>John Wiley & Sons</general><general>John Wiley and Sons, Ltd</general><general>Wiley Periodicals Inc</general><scope>BSCLL</scope><scope>AAYXX</scope><scope>CITATION</scope><scope>HFIND</scope><scope>HZAIM</scope><scope>K30</scope><scope>PAAUG</scope><scope>PAWHS</scope><scope>PAWZZ</scope><scope>PAXOH</scope><scope>PBHAV</scope><scope>PBQSW</scope><scope>PBYQZ</scope><scope>PCIWU</scope><scope>PCMID</scope><scope>PCZJX</scope><scope>PDGRG</scope><scope>PDWWI</scope><scope>PETMR</scope><scope>PFVGT</scope><scope>PGXDX</scope><scope>PIHIL</scope><scope>PISVA</scope><scope>PJCTQ</scope><scope>PJTMS</scope><scope>PLCHJ</scope><scope>PMHAD</scope><scope>PNQDJ</scope><scope>POUND</scope><scope>PPLAD</scope><scope>PQAPC</scope><scope>PQCAN</scope><scope>PQCMW</scope><scope>PQEME</scope><scope>PQHKH</scope><scope>PQMID</scope><scope>PQNCT</scope><scope>PQNET</scope><scope>PQSCT</scope><scope>PQSET</scope><scope>PSVJG</scope><scope>PVMQY</scope><scope>PZGFC</scope><scope>8BJ</scope><scope>FQK</scope><scope>JBE</scope><scope>JQ2</scope></search><sort><creationdate>199204</creationdate><title>Automobile insurance ratemaking in the presence of asymmetrical information</title><author>Dionne, G. ; Vanasse, C.</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c4974-d03654c10eb59284ab84586c366e10a4ffdc5c66ef7fd40a6c1e365e978bf2223</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>1992</creationdate><topic>Accidents</topic><topic>Asymmetric information</topic><topic>Automobile insurance</topic><topic>Automobiles</topic><topic>Binomials</topic><topic>Econometrics</topic><topic>Economic models</topic><topic>Estimators</topic><topic>Insurance industry</topic><topic>Insurance premiums</topic><topic>Insurance providers</topic><topic>Insurance rates</topic><topic>Regression analysis</topic><topic>Risk assessment</topic><topic>Statistical analysis</topic><topic>Workers compensation insurance</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Dionne, G.</creatorcontrib><creatorcontrib>Vanasse, C.</creatorcontrib><collection>Istex</collection><collection>CrossRef</collection><collection>Periodicals Index Online Segment 16</collection><collection>Periodicals Index Online Segment 26</collection><collection>Periodicals Index Online</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - West</collection><collection>Primary Sources Access (Plan D) - International</collection><collection>Primary Sources Access & Build (Plan A) - MEA</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - Midwest</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - Northeast</collection><collection>Primary Sources Access (Plan D) - Southeast</collection><collection>Primary Sources Access (Plan D) - North Central</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - Southeast</collection><collection>Primary Sources Access (Plan D) - South Central</collection><collection>Primary Sources Access & Build (Plan A) - UK / I</collection><collection>Primary Sources Access (Plan D) - Canada</collection><collection>Primary Sources Access (Plan D) - EMEALA</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - North Central</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - South Central</collection><collection>Primary Sources Access & Build (Plan A) - International</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - International</collection><collection>Primary Sources Access (Plan D) - West</collection><collection>Periodicals Index Online Segments 1-50</collection><collection>Primary Sources Access (Plan D) - APAC</collection><collection>Primary Sources Access (Plan D) - Midwest</collection><collection>Primary Sources Access (Plan D) - MEA</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - Canada</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - UK / I</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - EMEALA</collection><collection>Primary Sources Access & Build (Plan A) - APAC</collection><collection>Primary Sources Access & Build (Plan A) - Canada</collection><collection>Primary Sources Access & Build (Plan A) - West</collection><collection>Primary Sources Access & Build (Plan A) - EMEALA</collection><collection>Primary Sources Access (Plan D) - Northeast</collection><collection>Primary Sources Access & Build (Plan A) - Midwest</collection><collection>Primary Sources Access & Build (Plan A) - North Central</collection><collection>Primary Sources Access & Build (Plan A) - Northeast</collection><collection>Primary Sources Access & Build (Plan A) - South Central</collection><collection>Primary Sources Access & Build (Plan A) - Southeast</collection><collection>Primary Sources Access (Plan D) - UK / I</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - APAC</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - MEA</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>International Bibliography of the Social Sciences</collection><collection>International Bibliography of the Social Sciences</collection><collection>ProQuest Computer Science Collection</collection><jtitle>Journal of applied econometrics (Chichester, England)</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Dionne, G.</au><au>Vanasse, C.</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Automobile insurance ratemaking in the presence of asymmetrical information</atitle><jtitle>Journal of applied econometrics (Chichester, England)</jtitle><addtitle>J. Appl. Econ</addtitle><date>1992-04</date><risdate>1992</risdate><volume>7</volume><issue>2</issue><spage>149</spage><epage>165</epage><pages>149-165</pages><issn>0883-7252</issn><eissn>1099-1255</eissn><coden>JAECET</coden><abstract>Automobile insurance is an example of a market where multi-period contracts are observed. This form of contract can be justified by asymmetrical information between the insurer and the insured. Insurers use risk classification together with bonus-malus systems. In this paper we show that the actual methodology for the integration of these two approaches can lead to inconsistencies. We develop a statistical model that adequately integrates risk classification and experience rating. For this purpose we present Poisson and negative binomial models with regression component in order to use all available information in the estimation of accident distribution. A bonus-malus system which integrates a priori and a posteriori information on an individual basis is proposed, and insurance premium tables are derived as a function of time, past accidents and the significant variables in the regression. Statistical results were obtained from a sample of 19,013 drivers.</abstract><cop>Chichester</cop><pub>Wiley Subscription Services, Inc., A Wiley Company</pub><doi>10.1002/jae.3950070204</doi><tpages>17</tpages></addata></record> |
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| ispartof | Journal of applied econometrics (Chichester, England), 1992-04, Vol.7 (2), p.149-165 |
| issn | 0883-7252 1099-1255 |
| language | eng |
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| source | Periodicals Index Online; Jstor Complete Legacy |
| subjects | Accidents Asymmetric information Automobile insurance Automobiles Binomials Econometrics Economic models Estimators Insurance industry Insurance premiums Insurance providers Insurance rates Regression analysis Risk assessment Statistical analysis Workers compensation insurance |
| title | Automobile insurance ratemaking in the presence of asymmetrical information |
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