Empirical tests for ex post moral hazard in a market for automobile insurance
Author(s)
Rowell, D
Nghiem, S
Connelly, LB
Griffith University Author(s)
Year published
2021
Metadata
Show full item recordAbstract
Ex post moral hazard arises when the insured has an unobservable influence on the size of a loss after its occurrence. In automobile (property) insurance, ex post moral hazard could increase in the scope of the repairs and/or the value of the repairs. Both vehicle owners and auto repairers could gain from increasing the scope of repairs, while auto repairers would gain from an increase in the value of repairs. An analysis of 994 Australian road traffic crashes found that ex post moral hazard increased the value of repairs by 46.8 per cent of which 9 percentage points was explained by an increase in the scope of the repairs, ...
View more >Ex post moral hazard arises when the insured has an unobservable influence on the size of a loss after its occurrence. In automobile (property) insurance, ex post moral hazard could increase in the scope of the repairs and/or the value of the repairs. Both vehicle owners and auto repairers could gain from increasing the scope of repairs, while auto repairers would gain from an increase in the value of repairs. An analysis of 994 Australian road traffic crashes found that ex post moral hazard increased the value of repairs by 46.8 per cent of which 9 percentage points was explained by an increase in the scope of the repairs, which was defined as an increased from 2 to 2.4 parts per auto repair.
View less >
View more >Ex post moral hazard arises when the insured has an unobservable influence on the size of a loss after its occurrence. In automobile (property) insurance, ex post moral hazard could increase in the scope of the repairs and/or the value of the repairs. Both vehicle owners and auto repairers could gain from increasing the scope of repairs, while auto repairers would gain from an increase in the value of repairs. An analysis of 994 Australian road traffic crashes found that ex post moral hazard increased the value of repairs by 46.8 per cent of which 9 percentage points was explained by an increase in the scope of the repairs, which was defined as an increased from 2 to 2.4 parts per auto repair.
View less >
Journal Title
Annals of Actuarial Science
Note
This publication has been entered as an advanced online version in Griffith Research Online.
Subject
Insurance studies