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  4. Limited Information and its Impact on a Policyholder's Optimal Choice on Deductibles
 
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Limited Information and its Impact on a Policyholder's Optimal Choice on Deductibles

Type
conference paper
Date Issued
2022
Author(s)
Fey, Jan-Christian  
;
Schmeiser, Hato  
;
Schreiber, Florian  
Abstract
When determining the optimal deductible level for an insurance policy, a policyholder faces two sources of uncertainty. First, uncertainty arises from the randomness of future losses. Second, the opacity of the functional forms of the policyholder's loss distribution and utility function also contributes to uncertainty. While the academic literature focuses on the former, we additionally include limited information on these functional forms in our model setting to reflect real-world decision making. That is, we draw on an expected utility framework and analyze the relationship between optimal deductible levels under limited and full information. We also derive several decision rules under limited information in order to approximate the optimal deductible level under full information.
Language
English
HSG Classification
contribution to scientific community
HSG Profile Area
None
Event Title
Jahrestagung des Deutschen Vereins für Versicherungswissenschaft e.V. (DVfVW) 2022
Event Location
Online
Event Date
March 16-17, 2022
URL
https://www.alexandria.unisg.ch/handle/20.500.14171/109288
Subject(s)

economics

Division(s)

IVW - Institute of In...

Eprints ID
267061
File(s)
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Thumbnail Image

open.access

Name

Presentation Jahrestagung DVfVW 2022.pdf

Size

409.98 KB

Format

Adobe PDF

Checksum (MD5)

5c3afd0e045e1beb253238379b7b7ca7

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