A Research on the Asymmetric Information Problems in the Automobile Insurance Market of Taiwan
Date Issued
2006
Date
2006
Author(s)
Wang, Chi-Ling
DOI
zh-TW
Abstract
Abstract
The first part of this research on the asymmetric information problem in the automobile comprehensive insurance of Taiwan emphasizes on separating it into asymmetric information about risk type and asymmetric information about the risk aversion attitude. We compare the heterogeneity between new car and old car policies; and analyze pair-wisely on the policies of type A, B and C. By conditional correlation analysis, we find evidences to support the existence of asymmetric information about risk type between type A and C as well as type B and C. Our empirical evidences indicate that there could exist asymmetric information about the risk aversion attitude between type A and B. Our results are robust to the car age. The only difference is the threshold effect about the claim amount which comes from that new cars get stronger asymmetric information. In the full sample, the audit from insurance company is more severe when the claim amount increases. On the other hand, in the sub-sample (car age is more then three years), the insured becomes more risk averse when the loss amount increases. Our conclusion also won’t change by the choice of tested data area. The only difference is in the strength of their asymmetric information. Second part of this research using the data of switching contracts through years in comprehensive automobile insurance of Taiwan, Li, Liu and Yeh (2005) successfully isolate the adverse selection problem and find deductible in insurance contract provide incentives on moral hazard. This paper follows their methodology to test the same problem in the same market from the view point of insurance contracts with different coverage items. This paper finds that incentive effect exists when policyholders switch their policies from contracts type A or B into contract type C. It implies that high coverage contracts may cause careless driving. But this paper can not confirm the incentive effect when the policyholders switch their policies from contract type A into contract type B. When the unknown reason claims are cut out, there is no evidence of incentive effect, but when the unknown reason claims are included, the evidence existed. But we can not make sure that is the truly evidence of incentive effect, or that is only from more coverage items including more claims. We also found the evidence to support that insurance companies tighten auditing criteria when the claim amount rises. All outcomes in the paper are generally held despite different deductible
Subjects
訊息不對稱
道德風險
逆選擇
動機效果
汽車保險
asymmetric information
moral hazard
adverse selection
automobile insurance
Type
thesis
File(s)![Thumbnail Image]()
Loading...
Name
ntu-95-D91723011-1.pdf
Size
23.31 KB
Format
Adobe PDF
Checksum
(MD5):3ec678d6b999f434c85591cf61f53287