Insurance Decision Making And Market Behavior
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| Author | : Howard Kunreuther |
| Publisher | : Now Publishers Inc |
| Total Pages | : 80 |
| Release | : 2006 |
| Genre | : Business & Economics |
| ISBN | : 1933019255 |
Considerable evidence suggests that many people for whom insurance is worth purchasing do not have coverage and others who appear not to need financial protection against certain events actually have purchased coverage. There are certain types of events for which one might expect to see insurance widely marketed are now viewed today by insurers as uninsurable and there are other policies one might not expect to be successfully marketed that exist on a relatively large scale. In addition, evidence suggests that cost-effective preventive measures are sometimes rewarded by insurers in ways that could change their clients' behavior. These examples reveal that insurance purchasing and marketing activities do not always produce results that are in the best interest of individuals at risk. Insurance Decision Making and Market Behavior discusses such behavior with the intent of categorizing these insurance "anomalies". It represents a first step in constructing a theory of insurance decision making to explain behavior that does not conform to standard economic models of choice and decision-making. Finally, the authors propose a set of prescriptive solutions for improving insurance decision-making.
| Author | : Veselina Milanova |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2018 |
| Genre | : |
| ISBN | : |
Consumer behavior and in particular consumer decision making is key to successful marketing strategies. The insurance industry is no exception in this regard. Consumers employ different decision making strategies to make an insurance decision - be it for or against a certain insurance policy, whether to rely on external advice or decide alone, or whether to entrust the own safety to a new player in the industry. The aim of this dissertation is to look at consumer decision making strategies from different perspectives. By doing so, this work contributes to both academia and practice, so that they can develop a better understanding of what benefits and harms consumers when making an insurance decision. The dissertation spans over five parts. Part I frames the overall goals of the research by giving an overview of the state of the art in the field and highlighting the contributions to theory and practice. Part II and III focus on how consumers can be protected as participants in the insurance marketplace based on their current behavioral patterns. The fourth part researches intangible sharing services and empirically investigates why consumers participate in them. The last part conceptualizes the actors and relationships that shape the essence of collaborative consumption, a trend in consumer exchange markets that has found its way to the insurance industry.
| Author | : Howard C. Kunreuther |
| Publisher | : Cambridge University Press |
| Total Pages | : 343 |
| Release | : 2013-01-28 |
| Genre | : Business & Economics |
| ISBN | : 0521845726 |
This book examines the behavior of individuals at risk and insurance industry policy makers involved in selling, buying and regulation.
| Author | : Howard Kunreuther |
| Publisher | : |
| Total Pages | : 344 |
| Release | : 2013 |
| Genre | : Consumer behavior |
| ISBN | : 9781139621007 |
"This book examines the behavior of individuals at risk, insurance industry decision makers and policy makers involved in the selling, buying, and regulating of insurance"--
| Author | : R. M. Hogarth |
| Publisher | : |
| Total Pages | : 47 |
| Release | : 1984 |
| Genre | : |
| ISBN | : |
The analysis of insurance decision making has traditionally been based on the expected utility model. However, whereas this model ignores the precision with which probabilities can be estimated, there is considerable evidence that uncertainty about uncertainties does affect choice behavior. This paper examines the effects of such ambiguity on insurance decision making by both firms and consumers. After providing examples of the possible effects of ambiguity on the market for insurance, insurance decision making is analyzed theoretically with the aid of the ambiguity model developed by Einhorn and Hogarth (1984). The implications of this model are then tested in a series of four experiments using economically sophisticated subjects. The experimental results accord closely with the theoretical predictions, e.g.: firm's minimum selling prices are more sensitive to ambiguity than consumers' maximum buying prices; for firms, the most profitable market segment per dollar coverage occurs for small probability of loss events where consumers are ambiguous but firms are not; conditions exist where people seek rather than avoid ambiguity.
| Author | : Ricardas Zitikis |
| Publisher | : MDPI |
| Total Pages | : 210 |
| Release | : 2020-04-02 |
| Genre | : Business & Economics |
| ISBN | : 3039285165 |
Developing techniques for assessing various risks and calculating probabilities of ruin and survival are exciting topics for mathematically-inclined academics. For practicing actuaries and financial engineers, the resulting insights have provided enormous opportunities but also created serious challenges to overcome, thus facilitating closer cooperation between industries and academic institutions. In this book, several renown researchers with extensive interdisciplinary research experiences share their thoughts that, in one way or another, contribute to the betterment of practice and theory of decision making under uncertainty. Behavioral, cultural, mathematical, and statistical aspects of risk assessment and modelling have been explored, and have been often illustrated using real and simulated data. Topics range from financial and insurance risks to security-type risks, from one-dimensional to multi- and even infinite-dimensional risks. The articles in the book were written with a broad audience in mind and should provide enjoyable reading for those with university level degrees and/or those who have studied for accreditation by various actuarial and financial societies.
| Author | : |
| Publisher | : |
| Total Pages | : |
| Release | : 2017 |
| Genre | : |
| ISBN | : 9789292007492 |
The study had a threefold objective: Collecting data and evidence, testing a range of remedies to improve consumer decision-making and interest in cross-border offers, and estimating savings consumers could make. The preparatory phase involved the collection of qualitative and quantitative evidence on both demand for and supply of insurance and explored barriers and drivers of cross-border purchases, to support the design of the experimental phase; it consisted of desk-based research, stakeholder interviews, and focus groups. Task 2 involved a consumer survey conducted in conjunction with behavioural experiments, to provide quantitative evidence on consumers' experiences in the market, the impact of contract features and the presentation of information on consumers' decision-making, the interplay between contract features and behavioural traits, and consumers' interest in and barriers to purchasing insurance cross-border. In particular, the experiments tested the effectiveness of remedies to improve consumer decision-making. The survey examined respondents' behavioural characteristics, experience, and comprehension. Task 3 used the data and evidence collected to estimate potential savings for consumers that better choices may allow for the products studied. The study conclusions and recommendations address a number of general and cross-border insurance issues, such as the provision of information to consumers, the purchasing process, and levels of awareness and understanding.
| Author | : Howard C. Kunreuther |
| Publisher | : |
| Total Pages | : 19 |
| Release | : 2015 |
| Genre | : Economics |
| ISBN | : |
This paper describes the results of a web-based multi-period insurance purchasing experiment focusing on how individuals make insurance choices for low-probability, high-consequence events. Participants were told the probability and resulting losses of a hurricane occurring and were informed that these were stable from period to period. We contrast the model of informed expected utility [E(U)] maximization with alternative behavioral models of choice as explanations for what we observe. The majority of individuals (63 percent) behaved in ways that were consistent with expected utility theory, although we do not know whether these individuals were utilizing other decision rules. A sizeable number of uninsured individuals decided to purchase insurance after learning that they had suffered a loss and revealing that they were unhappy about having been uninsured. In this sense, the study shows that a loss coupled with emotions is likely to play an important role in convincing an uninsured person to buy coverage. In contrast, insured individuals who did not suffer a loss rarely dropped coverage. The paper concludes by raising questions regarding the welfare implications of this behavior.
| Author | : Amy Finkelstein |
| Publisher | : Columbia University Press |
| Total Pages | : 161 |
| Release | : 2014-12-02 |
| Genre | : Medical |
| ISBN | : 0231538685 |
Addressing the challenge of covering heath care expenses—while minimizing economic risks. Moral hazard—the tendency to change behavior when the cost of that behavior will be borne by others—is a particularly tricky question when considering health care. Kenneth J. Arrow’s seminal 1963 paper on this topic (included in this volume) was one of the first to explore the implication of moral hazard for health care, and Amy Finkelstein—recognized as one of the world’s foremost experts on the topic—here examines this issue in the context of contemporary American health care policy. Drawing on research from both the original RAND Health Insurance Experiment and her own research, including a 2008 Health Insurance Experiment in Oregon, Finkelstein presents compelling evidence that health insurance does indeed affect medical spending and encourages policy solutions that acknowledge and account for this. The volume also features commentaries and insights from other renowned economists, including an introduction by Joseph P. Newhouse that provides context for the discussion, a commentary from Jonathan Gruber that considers provider-side moral hazard, and reflections from Joseph E. Stiglitz and Kenneth J. Arrow. “Reads like a fireside chat among a group of distinguished, articulate health economists.” —Choice
| Author | : Peter Zweifel |
| Publisher | : Springer Science & Business Media |
| Total Pages | : 461 |
| Release | : 2012-02-24 |
| Genre | : Business & Economics |
| ISBN | : 3642205488 |
"Winner of the 2014 Kulp-Wright Book Award Presented by the American Risk and Insurance Association". More information can be found here: http://www.aria.org/awards/bookawards.htm Insurance Economics brings together the economic analysis of decision making under risk, risk management and demand for insurance by individuals and corporations, objectives pursued and management tools used by insurance companies, the regulation of insurance, and the division of labor between private and social insurance. Appropriete both for advanced undergraduate and graduate students of economics, management, and finance, this text provides the background required to understand current research. Predictions derived from theoretical argument are not only stated but confronted with empirical evidence. Throughout the book, conclusions summarize results, helping readers to check their knowledge and understanding. Issues discussed include paradoxa in decision making under risk, selection of favorable risks by insurers, the possibility of a "death spiral" in insurance markets, and future challenges such as re-regulation in the wake of the 2007-09 financial crisis and the increasing availability of generic information.
