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The Asymmetric Information Problem in Taiwan's Cancer Insurance Market

Author

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  • Kili C Wang

    (Department of Insurance, Tamkang University, Taipei, Taiwan.
    Risk and Insurance Research Center, College of Commerce, National Chengchi University, Taipei, Taiwan.)

  • Jin-Lung Peng

    (Department of Risk Management and Insurance, National Chengchi University, Taipei, Taiwan.)

  • Yi-Yun Sun

    (Graduate Institute of Finance and Insurance, Shih Chien University, Taipei, Taiwan.)

  • Yao-Chia Chang

    (Graduate Institute of Finance and Insurance, Tamkang University, Taipei, Taiwan.)

Abstract

This paper investigates the problem of asymmetric information in Taiwan’s cancer insurance market. Through the survey data, we find evidence of adverse selection existing in this market. Furthermore, we collect additional information on the individual, and find that the individual’s family cancer history contains additional valuable information. It can not only more accurately predict the probability of contracting cancer, as well as predict the willingness to purchase extended cancer insurance, but it can also help to mitigate the severity of adverse selection in the insurance market.

Suggested Citation

  • Kili C Wang & Jin-Lung Peng & Yi-Yun Sun & Yao-Chia Chang, 2011. "The Asymmetric Information Problem in Taiwan's Cancer Insurance Market," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 36(2), pages 202-219, December.
    • Handle: RePEc:pal:genrir:v:36:y:2011:i:2:p:202-219
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    Cited by:

    1. Martin Eling & Ruo Jia & Yi Yao, 2017. "Between-Group Adverse Selection: Evidence From Group Critical Illness Insurance," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 84(2), pages 771-809, June.
    2. Chang, Vincent Y.L. & Hung, Kuo Ming & Wang, Kili C. & Yang, Sand, 2024. "Information asymmetry in reinsurance through various ceded contracts," Pacific-Basin Finance Journal, Elsevier, vol. 84(C).

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