Essays on Risk Differentiation and Price Transparency in the Insurer's Pricing Process

Download or read book Essays on Risk Differentiation and Price Transparency in the Insurer's Pricing Process written by Tina Störmer and published by . This book was released on 2014 with total page 141 pages. Available in PDF, EPUB and Kindle. Book excerpt: Current insurance pricing processes are subject to change. On the one hand, this is because of recent external factors, such as political and economic conditions. So, for example, the European Court of Justice (ECJ) concluded in its judgment in March 2011 that gender-specific insurance rates are prohibited from December 21, 2012 in the European Union. And thus, the hitherto main risk-rating factor "gender" was directly banned for use in insurers' underwriting. On the other hand, the relevance of refinement of insurers' pricing structure is reflected in the context how future earnings and competitive advantage can be generated. This doctoral thesis, which comprises four research papers, is aimed to provide new insights into the field of insurance pricing. Recent internal and external developments are critically appraised with special consideration of the customer viewpoint to derive implications for insurers' pricing processes and strategic price communication. The first paper, "Unisex Insurance Pricing: Consumers' Perception and Market Implications", examines the ongoing discussion about discrimination which occurred, according to the ECJ judgment. Thus, the area of conflict between discrimination law on the one hand, and the principle of actuarial fairness and actuarial equality on the other hand is taken into account. We analyze the questions whether the consumer as an individual feels treated fairly and what implications the ECJ judgment has on the insurance industry and the consumers. Our analysis is based on an international consumer survey to empirically determine the consumers' perception of the use of price differentiation criteria in the key insurance business lines, and its perceived importance. Our results indicate that the consumers perceive the single price differentiation factors in different ways depending on business lines and countries. The second paper, "A Comparison of Insurers' Usage and Consumers'