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La mauvaise perception des risques de longévité et de dépendance ne suffit pas à expliquer la faiblesse du marché de l'assurance dépendance (au Canada)

Author

Listed:
  • M Martin Boyer

    (HEC Montréal - HEC Montréal)

  • Philippe de Donder

    (TSE-R - TSE-R Toulouse School of Economics – Recherche - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Claude Fluet

    (ULaval - Université Laval [Québec])

  • Pierre-Carl Michaud

    (HEC Montréal - HEC Montréal)

  • Marie- Louise Leroux

Abstract

This article studies the some of the reasons underlying the under-provision of LTC insurance in Québec and Ontario. Using 2016 survey data, we demonstrate that misperception biases regarding demographic risks (of mortality and of dependency) cannot alone explain the low demand for this insurance product. Even if individual perceptions of these risks are heterogenous, individuals tend on average to over-estimate their survival probability and the probability of entering a LTC home, which should lead to over-insurance rather than to under-insurance for LTC. We show instead that the most probable reason for the under-provision of LTC insurance is that individuals do not know this financial product. Hence, if policy makers were to foster the purchase of LTC insurance, they should run advertising campaigns to inform the public about these products. Another interesting policy could be to develop bundled insurance products.

Suggested Citation

  • M Martin Boyer & Philippe de Donder & Claude Fluet & Pierre-Carl Michaud & Marie- Louise Leroux, 2023. "La mauvaise perception des risques de longévité et de dépendance ne suffit pas à expliquer la faiblesse du marché de l'assurance dépendance (au Canada)," Post-Print hal-04374986, HAL.
    • Handle: RePEc:hal:journl:hal-04374986
    Note: View the original document on HAL open archive server: https://hal.science/hal-04374986
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    Keywords

    I13; biais de perception; probabilité de survie; probabilité de perte d'autonomie; demande d'assurance soins de longue durée;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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