Insurance loss coverage and social welfare

被引:4
|
作者
Hao, MingJie [1 ]
Macdonald, Angus S. [2 ]
Tapadar, Pradip [1 ]
Thomas, R. Guy [1 ]
机构
[1] Univ Kent, Sch Math Stat & Actuarial Sci, Canterbury CT2 7FS, Kent, England
[2] Heriot Watt Univ, Dept Actuarial Math & Stat, Edinburgh, Midlothian, Scotland
关键词
Adverse selection; loss coverage; social welfare; RISK CLASSIFICATION; DEMAND; ELASTICITY; MARKETS;
D O I
10.1080/03461238.2018.1513865
中图分类号
O1 [数学];
学科分类号
0701 ; 070101 ;
摘要
Restrictions on insurance risk classification may induce adverse selection, which is usually perceived as a bad outcome, both for insurers and for society. However, a social benefit of modest adverse selection is that it can lead to an increase in 'loss coverage', defined as expected losses compensated by insurance for the whole population. We reconcile the concept of loss coverage to a utilitarian concept of social welfare commonly found in the economic literature on risk classification. For iso-elastic insurance demand, ranking risk classification schemes by (observable) loss coverage always give the same ordering as ranking by (unobservable) social welfare.
引用
收藏
页码:113 / 128
页数:16
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