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Risk classification with on‐demand insurance.
- Source :
- Journal of Risk & Insurance; Dec2023, Vol. 90 Issue 4, p975-990, 16p
- Publication Year :
- 2023
-
Abstract
- On‐demand insurance is an innovative business model from the InsurTech space, which provides coverage for episodic risks. It makes use of a simple fact in a practical way: People differ in their frequency of exposure as well as the probability of loss. The extra dimension of heterogeneity can be used to screen the insured and shifts the utility‐possibility frontier outward. We provide a sufficient condition under which type‐specific full insurance at the actuarially fair price is incentive compatible. We also show that our results hold for various real‐world implementations of on‐demand insurance. [ABSTRACT FROM AUTHOR]
- Subjects :
- INSURANCE
PRICES
BUSINESS models
CLASSIFICATION
Subjects
Details
- Language :
- English
- ISSN :
- 00224367
- Volume :
- 90
- Issue :
- 4
- Database :
- Complementary Index
- Journal :
- Journal of Risk & Insurance
- Publication Type :
- Academic Journal
- Accession number :
- 173627253
- Full Text :
- https://doi.org/10.1111/jori.12429