TY - JOUR

T1 - Is the market classification of risk always efficient?

T2 - evidence from German third party motor insurance

AU - Schwarze, Reimund

AU - Wein, Thomas

N1 - Literaturverz. S. 200 - 203 http://www.risk-insurance.de/

PY - 2005

Y1 - 2005

N2 - This paper studies the empirical effects of risk classification in the mandatory third-party motor insurance of Germany following the European Union’s directive to de-regulate insurance tariffs of 1994. We find evidence that inefficient risk categories had been selected while potentially efficient information was dismissed. Risk classifi-cation did generally not improve the efficiency of contracting or the composition of insureds in this market. These findings are partly explained by the continuing exis-tence of institutional restraints in this market such as compulsory fixed coverage and unitary owner insurance.

AB - This paper studies the empirical effects of risk classification in the mandatory third-party motor insurance of Germany following the European Union’s directive to de-regulate insurance tariffs of 1994. We find evidence that inefficient risk categories had been selected while potentially efficient information was dismissed. Risk classifi-cation did generally not improve the efficiency of contracting or the composition of insureds in this market. These findings are partly explained by the continuing exis-tence of institutional restraints in this market such as compulsory fixed coverage and unitary owner insurance.

KW - Economics

KW - Kraftfahrzeughaftpflichtversicherung

KW - Haftpflichtrisiko

KW - Markteffizienz

M3 - Journal articles

VL - 1

SP - 173

EP - 203

JO - German Risk and Insurance Review

JF - German Risk and Insurance Review

SN - 1860-5400

ER -