Extreme Types of Bonus-Malus System Fair by Transitions Rules on the Obligatory Automobile Insurance Market
Four extreme types ofBMS with 'fair' transition rules defined in previous articles treat any driver with a given claim history in a very different way. If these systems coexisted on an obligatory insurance market, each of them would attract clients with different claim history. This would influence the size and the structure of portfolios in insurance companies using each of the systems, and financial situation of the insurers and the insureds as well. The question remains if all the systems could survive this competition and how the existence of other systems on the market might influence the tariff function of each of them. The aim of this article is to present a multi-equation random (original abstract)
- Akerlof, G.A. , The Market for 'Lemons': Quality Uncertainty and the Market Mechanism, Quarterly Journal of Economics 84(3), pp. 488-500.
- Cieślik, B. , Coexistence of different bonus-malus systems on the automobile insurance market (in Polish), Institute of Econometrics, Warsaw School of Economics, Warsaw.
- Cieślik, B. , Bonus-malus system as a tool of competition on the market of automobile insurance (in Polish), in: Quantitative methods in economics, Warsaw School of Economics, Warsaw.
- Cieślik, B. , Bonus-malus system as a tool of competition on the market of automobile insurance (in Polish), Institute of Econometrics, Warsaw School of Economics, Warsaw.
- Cieślik, B. , Comparative analysis of bonus-malus systems in Poland (in Polish), Institute of Econometrics, Warsaw School of Economics, Warsaw.
- Dionne, G. , Handbook of Insurance, Kluwer Academic Publishers, Boston.
- Fels, E. , A Helicopter Tour over Competing Bonus-Malus Systems, research paper at the Economic Department of Austrian Association of Insurance Companies, Vienna.
- Hossack, I.B., Pollard, J.H., Zehnwirth B. , Introductory statistics with applications in general insurance, Cambridge University Press.
- Iosifescu, M. , Finite Markov Processes and Their Applications, John Wiley & Sons.
- Lemaire, J. , Bonus - Malus Systems in Automobile Insurance, Kluwer Academic Publishers, Boston.
- Lemaire, J., Viswanathan, K.S. , Bonus-Malus Systems in a Deregulated Environment: Forecasting Market Shares Using Diffusion Models, Astin Bulletin, Vol.35, No. 1, 299-319.
- Otto, W. , Property insurance, part I (in Polish), WNT, Warsaw.
- Panjer, H.H., Willmot, G.E. , Motivating Claims Frequency Models, Proceedings of the Twenty-third International Congress of Actuaries, Helsinki, 3, pp. 269-284.
- Podgórska M., Cieślik B, Kryszeń B., Niemiec M., Topolewski M. (2006), Fair bonus-malus system in the sense of transitions between classes (in Polish), Institute of Econometrics, Warsaw School of Economics, Warsaw.
- Podgórska M., Śliwka P., Topolewski M., Wrzosek M. (2003), Markov chains in theory and applications (in Polish), Warsaw School of Economics, Warsaw.
- Rothschild, M., Stiglitz, J. , Equilibrium In Competitive Insurance Markets: An Essay on the Economics of Imperfect Information, Quarterly Journal of Economics, Vol.90, pp. 629-949.
- Schlesinger, H., Graf von der Schulenburg, J.M. , Consumer Information and Decision to Switch Insurers, Journal of Risk and Insurance 10, pp. 591-615.
- Subramanian, K. , Bonus-Malus Systems in a Competitive Environment, North American Actuarial Journal, 2, pp. 38-44.