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The Supply of Insurance

In: Insurance Economics

Author

Listed:
  • Peter Zweifel

    (University of Zurich)

  • Roland Eisen

Abstract

In this chapter the several dimensions of supply of insurance coverage are expounded. A first dimension is the pricing of insurance products. The objective is to calculate a minimum premium at which a single insurance product breaks even (noting that the market may not accept it). Section 6.1 introduces the reader to traditional premium calculation, where pricing depends upon the characteristics of the loss distribution and an exogenously given ruin probability (the probability of solvency, respectively), applying elements of probability theory. On the other hand, for the determination of the market price of an insurance product, the alternatives which are available to investors and insurance buyers (IB) on the capital market must be evaluated. Accordingly, in Sect. 6.2 elements of capital market theory are applied to derive the premium the insurance company (IC) must obtain to be sufficiently attractive to investors and can charge while still attracting IB, respectively.

Suggested Citation

  • Peter Zweifel & Roland Eisen, 2012. "The Supply of Insurance," Springer Texts in Business and Economics, in: Insurance Economics, edition 127, chapter 6, pages 205-263, Springer.
    • Handle: RePEc:spr:sptchp:978-3-642-20548-4_6
    DOI: 10.1007/978-3-642-20548-4_6
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    Citations

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    Cited by:

    1. Michael Gerfin & Boris Kaiser & Christian Schmid, 2015. "Healthcare Demand in the Presence of Discrete Price Changes," Health Economics, John Wiley & Sons, Ltd., vol. 24(9), pages 1164-1177, September.
    2. Martin B. Hackmann & R. Vincent Pohl & Nicolas R. Ziebarth, 2024. "Patient versus Provider Incentives in Long-Term Care," American Economic Journal: Applied Economics, American Economic Association, vol. 16(3), pages 178-218, July.
    3. Kauer, Lukas & McGuire, Thomas G. & Beck, Konstantin, 2020. "Extreme under and overcompensation in morbidity-based health plan payments: The case of Switzerland," Health Policy, Elsevier, vol. 124(1), pages 61-68.
    4. Stefan Boes & Michael Gerfin, 2016. "Does Full Insurance Increase the Demand for Health Care?," Health Economics, John Wiley & Sons, Ltd., vol. 25(11), pages 1483-1496, November.
    5. Shmueli, Amir & Stam, Piet & Wasem, Jürgen & Trottmann, Maria, 2015. "Managed care in four managed competition OECD health systems," Health Policy, Elsevier, vol. 119(7), pages 860-873.
    6. Stenbacka Rune & Tombak Mihkel, 2018. "Optimal Reimbursement Policy in Health Care: Competition, Ownership Structure and Quality Provision," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 18(1), pages 1-19, January.
    7. Minke Remmerswaal & Jan Boone & Rudy Douven, 2019. "Selection and moral hazard effects in healthcare," CPB Discussion Paper 393.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    8. Chung Jen Yang & Ying Che Tsai & Joseph J. Tien, 2017. "The Impacts of Persistent Behaviour and Cost-Sharing Policy on Demand for Outpatient Visits by the Elderly: Evidence from Taiwan’s National Health Insurance," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 42(1), pages 31-52, January.
    9. Kaufmann, Cornel & Müller, Tobias & Hefti, Andreas & Boes, Stefan, 2018. "Does personalized information improve health plan choices when individuals are distracted?," Journal of Economic Behavior & Organization, Elsevier, vol. 149(C), pages 197-214.
    10. Peter Zweifel, 2013. "Managed Care: Prescription for Failure? Lessons from Switzerland," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 11(01), pages 27-31, April.
    11. Rune Stenbacka & Mihkel Tombak, 2014. "Optimal Co-Payment Policy In Health Care: Competition, Ownership Structure And Quality Provision," Working Papers 140004, Canadian Centre for Health Economics.
    12. Stefan Pichler & Jan Ruffner, 2016. "Does it really make a difference? Health care utilization with two high deductible health care plans," KOF Working papers 16-404, KOF Swiss Economic Institute, ETH Zurich.
    13. Kaufmann, Cornel & Schmid, Christian & Boes, Stefan, 2017. "Health insurance subsidies and deductible choice: Evidence from regional variation in subsidy schemes," Journal of Health Economics, Elsevier, vol. 55(C), pages 262-273.
    14. Minke Remmerswaal & Jan Boone & Rudy Douven, 2019. "Selection and moral hazard effects in healthcare," CPB Discussion Paper 393, CPB Netherlands Bureau for Economic Policy Analysis.
    15. Martin Benjamin Hackmann & R. Vincent Pohl, 2018. "Patient vs. Provider Incentives in Long-Term Care," CESifo Working Paper Series 7373, CESifo.
    16. Peter Zweifel, 2013. "Managed Care: Prescription for Failure? Lessons from Switzerland," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 11(1), pages 27-31, 04.
    17. repec:ces:ifodic:v:11:y:2013:i:1:p:19078507 is not listed on IDEAS
    18. K. P. M. Winssen & R. C. Kleef & W. P. M. M. Ven, 2017. "A voluntary deductible in health insurance: the more years you opt for it, the lower your premium?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 18(2), pages 209-226, March.
    19. Andree Ehlert & Thomas Wein & Peter Zweifel, 2017. "Overcoming resistance against managed care – insights from a bargaining model," Health Economics Review, Springer, vol. 7(1), pages 1-15, December.
    20. Rischatsch, Maurus, 2015. "Who joins the network? Physicians’ resistance to take budgetary co-responsibility," Journal of Health Economics, Elsevier, vol. 40(C), pages 109-121.
    21. Maurus Rischatsch & Peter Zweifel, 2013. "What do physicians dislike about managed care? Evidence from a choice experiment," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 14(4), pages 601-613, August.

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