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Estimating the effect of a change in insurance pricing regime on accidents with endogenous mobility Dionne, Georges ; Dostie, Benoit

By: Contributor(s): Publication details: Montreal Interuniversity Research Centre on Enterprise Networks, Logistics and Transportation, CIRRELT, 2007; CIRRELT-2007-35, Description: 21 sSubject(s): Online resources: Abstract: In this paper, we estimate the impact of introducing a bonus-malus system on the probability of having automobile accidents, taking into account contract duration or the client mobility between insurers. We show that the new incentive scheme reduces accident rates of all policyholders when contract duration is taken into account, but does not affect accident rates of movers that shirk the imposed incentive effects of the new insurance pricing scheme.
Item type: Reports, conferences, monographs
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In this paper, we estimate the impact of introducing a bonus-malus system on the probability of having automobile accidents, taking into account contract duration or the client mobility between insurers. We show that the new incentive scheme reduces accident rates of all policyholders when contract duration is taken into account, but does not affect accident rates of movers that shirk the imposed incentive effects of the new insurance pricing scheme.