This article explores the legal implications of digital platforms in the insurance sector, with a focus on the duties of platform operators to provide information and advice from a German perspective. Insurance comparison platforms function as intermediaries, necessitating a business license, as German law recognizes only brokers and agents. Since comparing insurance products...
This paper examines the insurance of cyber-related risks, concentrating on cyberattacks that fall under the war exclusion in insurance contracts. We argue that though it is understandable that insurers include war exclusions to limit their risk exposure, this seriously limits the availability of cover when it is most needed. One of the problems is that insurers do not engage as...
Insurers are beginning to change their business practices and add sustainable attributes to their insurance products. However, little is known about consumers’ reactions to such sustainable attributes in insurance contracts. In three surveys, of which the main study is incentive compatible, we investigate how sustainable attributes affect consumers’ purchase decisions and examine...
Existing research on how international insurance demand varies with income is largely driven by cross-sectional variation post-1970. Drawing on newly collected historical long-run data on life insurance premiums starting as early as 1850 to 2020 for 20 OECD countries, we evaluate the ‘S-Curve’ predicting insurance demand as each country transitions through different income levels...
Insurtech is closely associated with digital transformation by new entrants that seek to disrupt insurance markets. However, the insurtech concept also includes its use by incumbent insurance companies, which are actively deploying a wide variety of insurtech applications to protect their market positions through innovation of their existing business models, e.g. through improved...
Hurricanes significantly harm homeowners through physical damage and long-term financial strain due to rising insurance costs, property value loss, and repair expenses. This paper focuses on the interrelated decisions of the government mitigation funding of residential acquisitions and retrofit subsidies and of price restrictions on the insurance market in eastern North Carolina...
On-demand insurance products cover risks for short periods of time via a smartphone or other electronic device. Such insurance contracts give policyholders the freedom to choose when to be insured in a flexible way. On-demand contracts may change the way risk is perceived. Therefore, we conduct an experiment and show that individuals can become exceptionally risk-averse when...
European insurers are allowed to make discretionary decisions in the calculation of Solvency II capital requirements. These choices include the design of risk models (ranging from a standard formula to a full internal model) and the use of long-term guarantees measures. This article examines the situation of insurers that utilize the discretionary scope regarding capital...
We examine the role of technology expense and asset data items with insurer efficiency. We show that insurers increasing investment in technology classified as expenses, experience increases in allocative efficiency the following year. Insurers that increase expenditures classified as technology assets realize decreases in cost and allocative efficiency the next year. In addition...
Around the world, there are persistent and growing health inequalities both between and within countries. The U.K. Government’s flagship policy for addressing inequalities is called ‘Levelling Up’. One of its missions is to narrow the gap in healthy life expectancy (HLE) between the healthiest and unhealthiest areas in England and to improve overall HLE by 5 years by 2035. We...
For the life insurance industry and pension schemes, mortality projections are critical for accurately managing exposure to longevity risk in terms of both premium setting and reserving. Frailty has been identified as an important latent factor underpinning the evolution of mortality rates. It represents the comorbidities that drive the deterioration of the human body’s...
The aim of this paper is to investigate the relevance of sustainable product attributes as compared to ongoing costs and risk–return profiles when individuals choose funds underlying unit-linked life insurances. Regarding sustainability attributes, we focus on the product classification according to the Sustainable Finance Disclosure Regulation as a European regulatory...
This article examines the claim that equity release mortgages, the U.K. equivalent of reverse mortgages in the U.S., are suitable investments for pension funds. We present valuation, stress test and scenario analysis results that suggest that equity release mortgages are unsuitable for pension funds because: (i) they bear returns that are typically below the risk-free rate; (ii...
This article examines the relationship between financial literacy and business interruption (BI) insurance among Italian entrepreneurs. Following an increase in unexpected shocks, such as COVID-19 and geopolitical conflicts, a high level of BI risk is expected to persist, especially among small firms, which play a key role in the Italian economy. Using a Bank of Italy 2021 survey...
This article looks at COVID-19-related issues in the context of commercial and industrial insurance cover taken out against the risk of infectious disease. The focus is on government action taken and regulation passed in the U.K. and in Germany, respectively, to redress the pandemic. The insurance market offers business interruption (BI) cover (in the U.K. and internationally) as...
The aim of this paper is to show how qualified investors in cat bonds can offer adequate pandemic business interruption protection in a comprehensive public–private coverage scheme. First, we propose a numerical model to expose how cat bonds can contribute to complement standard re/insurance by improving coverage of cedents even though risks are positively correlated during a...
Physicians can prescribe medicines for different indications than the tested and authorised ones. Such ‘off-label’ uses expand therapeutic options but also create uncertainties. The COVID-19 pandemic triggered new off-label uses and, despite issues being reported in the literature, these have not resulted in substantial personal injury litigation in the EU. Against this backdrop...
As the cyber insurance market is expanding and cyber insurance policies continue to mature, the potential of including pre-incident and post-incident services into cyber policies is being recognised by insurers and insurance buyers. This work addresses the question of how such services should be priced from the insurer’s viewpoint, i.e. under which conditions it is rational for a...