Suchergebnisse

The American insurance industry is shackled by regulations and restrictions on all sides. Fred Smith, of the Competitive Enterprise Institute, assesses the harm done. Could Britain follow?

Abstract
The purpose of this study is to investigate whether private insurance is a normal good by examining the effects of public insurance. Also, this study investigates how the amount of public insurance premium affects to the private insurance demand. The main results of this study are as follows. First, the private insurance has a tendency to be a normal good whether the public insurance benefit is fixed to household income. Second, the degree of loading of public insurance and average probability of accident taking place, which are the components of public insurance premium, relates to the private insurance demand, but whether this relation is positive or negative is indeterminate unless private insurance is actuarially fair.

This paper analyzes the political support for a public insurance in the presence of a private insurance alternative. The public insurance is compulsory and offers a uniform insurance policy. The private insurance is voluntary and can offer different insurance policies to different individual risks. We show that adverse selection on the private insurance market can lead a majority of individuals to prefer public insurance over private insurance, even if the median risk is below the average risk (so that the median ends upsubsidizing high-risk individuals). We also show that more risk aversion always leads to a greater political support for public insurance and that a mixture of public and private insurance is politically non sustainable. Lastly, we demonstrate how progressively more powerful information technology may help the private insurance market to mitigate the adverse selection problem and reduce the demand for public insurance threatening its political sustainability.

This paper analyzes the political support for a public insurance in the presence of a private insurance alternative. The public insurance is compulsory and offers a uniform insurance policy. The private insurance is voluntary and can offer different insurance policies to different individual risks. We show that adverse selection on the private insurance market can lead a majority of individuals to prefer public insurance over private insurance, even if the median risk is below the average risk (so that the median ends upsubsidizing high-risk individuals). We also show that more risk aversion always leads to a greater political support for public insurance and that a mixture of public and private insurance is politically non sustainable. Lastly, we demonstrate how progressively more powerful information technology may help the private insurance market to mitigate the adverse selection problem and reduce the demand for public insurance threatening its political sustainability.