Diss. Örebro : Örebro University, 2010

This thesis is concerned with the consequences of private information on risky traffic behavior from the perspective of the insurer, the society and the individual. The overall objective is to extend the knowledge of the consequences of private information on the demand for insurance coverage and contract outcome by conducting empirical research on Swedish data. Another aim is to establish if it is possible to identify and price risky traffic behavior such that the accident externality from speeding is reduced. Essay 1 establishes whether private information about traffic violations has any effect on the choice of coverage and ex post risk in the contract. Essay 2 investigates if traffic violations indicate whether the policyholder is a one period or a loyal customer. Essay 3 empirically investigates the relationship between risky behavior and characteristics of the vehicle owner and the vehicle. Essay 4 illustrates how insurance companies can combine contract theory and available and emerging technologies to identify risky traffic behavior. Essay 5 illustrates how the accident externality imposed on society can be reduced. Alternative policies are analyzed to implement optimal speed control.