Insuring non-verifiable losses : [Version November 2011]

Insurance contracts are often complex and difficult to verify outside the insurance relation. We show that standard one-period insurance policies with an upper limit and a deductible are the optimal incentive-compatible 
Insurance contracts are often complex and difficult to verify outside the insurance relation. We show that standard one-period insurance policies with an upper limit and a deductible are the optimal incentive-compatible contracts in a competitive market with repeated interaction. Optimal group insurance policies involve a joint upper limit but individual deductibles and insurance brokers can play a role implementing such contracts for the group of clients. Our model provides new insights and predictions about the determinants of insurance.
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Metadaten
Author:Neil A. Doherty, Christian Laux, Alexander Muermann
URN:urn:nbn:de:hebis:30:3-241157
Parent Title (German):CFS working paper series ; 2011,31
Series (Serial Number):CFS working paper series (2011, 31)
Publisher:Goethe-Univ., House of Finance, Center for Financial Studies
Place of publication:Frankfurt am Main
Document Type:Working Paper
Language:English
Year of Completion:2011
Year of first Publication:2011
Publishing Institution:Univ.-Bibliothek Frankfurt am Main
Release Date:2012/02/07
Tag:Deductible Insurance; Implicit Insurance Contracts; Insurance Brokers; Upper Limit
Issue:Version November 2011
Pagenumber:39
HeBIS PPN:312315651
Institutes:Center for Financial Studies (CFS)
Dewey Decimal Classification:332 Finanzwirtschaft
JEL-Classification:G22 Insurance; Insurance Companies
L14 Transactional Relationships; Contracts and Reputation; Networks
D68
Licence (German):License Logo Veröffentlichungsvertrag für Publikationen

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