EXTREME TYPES OF BMSF(TR) ON THE OBLIGATORY AUTOMOBILE INSURANCE MARKET

• Authors: Cieslik Barbara
• Languages of publication: EN

Abstracts

EN

This article concerns competition between different bonus-malus systems coexisting on the obligatory automobile insurance market. Four extreme types of BMS with 'fair' transition rules treat any driver with a given claim history in a very different way. If these systems coexisted on an obligatory insurance market, each of them would attract clients with different claim history. This would influence the size and structure of portfolios in insurance companies using each of the systems, and financial situation of the insurers and the insureds as well. The question remains if all the systems could survive this competition and how the existence of other systems on the market might influence the tariff function of each of them. The aim of this article is to present a dynamic multi-equation random-decision model which enables an analysis of market competition using Markov chains.

Keywords

EN

DYNAMIC RANDOM-DECISION MODEL; FAIR BONUS-MALUS SYSTEMS; OBLIGATORY INSURANCE MARKET

Discipline

• ECONOMICS: ECONOMICS

• Publisher: Warsaw School of Economics, Collegium of Economic Analysis
• Journal: Roczniki Kolegium Analiz Ekonomicznych
• Year: 2008
• Volume: 18
• Pages: 83-111
• Document type: ARTICLE

Contributors

author

Cieslik Barbara

• Barbara Cieslik, Szkola Glówna Handlowa w Warszawie, Instytut Ekonometrii, al. Niepodleglosci 164, 02-554 Warszawa, Poland

Identifiers

CEJSH db identifier

09PLAAAA061624