Assessing the Efficiency of an Insurance Provider. A Measurement Error Approach

Details

Serval ID
serval:BIB_BFBD069484A9
Type
Article: article from journal or magazin.
Collection
Publications
Institution
Title
Assessing the Efficiency of an Insurance Provider. A Measurement Error Approach
Journal
The Geneva Risk and Insurance Review
Author(s)
Jametti M., Von Ungern-Sternberg T.
ISSN
1554-964X
Publication state
Published
Issued date
2005
Peer-reviewed
Oui
Volume
30
Number
1
Pages
15-34
Language
english
Abstract
The purpose of this paper is to compare the cost efficiency of private and public property insurance providers in Switzerland. The most commonly used measure for this kind of exercise is the claims-premium ratio. We argue that this measure may give strongly biased results. We develop a simple model to test whether the elasticity of premiums with respect to claims is less than unity. We address the fact that premium income is relatively stable across time, while claims are not, using estimation techniques that correct for measurement error. We develop tools to cope with heteroskedasticity in such measurement errors and apply the model to a data set on 19 firms in housing insurance markets in Switzerland. We show that the public insurance providers are about 20% more cost efficient than their private counterparts.
Keywords
Insurance, Public and private, Cost efficiency, C/P ratio, Measurement error, CALS
Web of science
Open Access
Yes
Create date
19/11/2007 10:46
Last modification date
20/08/2019 15:34
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