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- Title
Do INSURANCE COMPANIES POSSESS AN INFORMATIONAL MONOPOLY? EMPIRICAL EVIDENCE FROM AUTO INSURANCE.
- Authors
Kofman, Paul; Nini, Gregory P.
- Abstract
This article investigates the impact of policyholder tenure on contractual relationships in nonlife insurance markets. For a sample of auto insurance policies, we find that average risk decreases with policyholder tenure, but the effect is entirely due to the impact of observable information. We re-ject the hypothesis that the incumbent insurer is privately learning faster about quality of their policyholders. We highlight the importance of a public signal regarding policyholders' claims experiences and suggest alternative explanations for the unconditional relationships in the data.
- Subjects
POLICYHOLDERS; RISK assessment; RISK (Insurance); INSURANCE applications; LIFE insurance policies
- Publication
Journal of Risk & Insurance, 2013, Vol 80, Issue 4, p1001
- ISSN
0022-4367
- Publication type
Article
- DOI
10.1111/j.1539-6975.2012.01487.x