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Please use this identifier to cite or link to this item:
https://tkuir.lib.tku.edu.tw/dspace/handle/987654321/129239
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| Title: | Representation, Medical Examination, and the Effectiveness of Underwriting: Evidence from A Life and Health Insurance Company |
| Authors: | Ho, Chia-Ling |
| Date: | 2026-04-15 |
| Issue Date: | 2026-04-30 12:05:28 (UTC+8) |
| Abstract: | This study examines whether underwriting methods—representation, medical examination, extra premiums, and coverage—effectively mitigate adverse selection using data from an insurance company. Regarding representation, we focus on statements disclosing pre-existing medical conditions. Our findings show that for insured individuals with claims, claim costs are higher for those with pre-existing conditions or who require medical examinations. These individuals are also charged extra premiums. However, their loss ratios do not significantly differ from those without pre-existing conditions or medical examination requirements, possibly due to extra premiums. A quasi-difference-in-differences (DID) analysis confirms that extra premiums significantly lower the loss ratio of high-risk insureds, indicating that extra premiums serve as an effective underwriting mechanism. Lastly, insured individuals with pre-existing conditions receive lower coverage than those without, a finding that contrasts with existing literature. Finally, using the method introduced by Chiappori and Salanie (2000), we find a statistically significant positive correlation between the residuals of coverage and claim costs (loss ratio), suggesting strong evidence of adverse selection. Overall, the evidence suggests that underwriting effectively mitigates adverse selection. |
| Relation: | Risk Management and Insurance Review |
| Appears in Collections: | [風險管理與保險學系] 期刊論文
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