An Empirical Analysis of Adverse Selection Factor：Group Accident Insurance in Taiwan’s Property and Liability Company.

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Title:	An Empirical Analysis of Adverse Selection Factor：Group Accident Insurance in Taiwan’s Property and Liability Company.
Authors:	Lee, Hsu-hua;Hsu, Ming-Yuan;Lee, Chen-Ying
Contributors:	淡江大學管理科學學系
Keywords:	adverse selection;group insurance;orded logistic regression
Date:	2013-05
Issue Date:	2013-09-27 10:45:37 (UTC+8)
Publisher:	新北市：淡江大學
Abstract:	Property and Liability Industry joined the accident insurance market in 2001.The past decade has witnessed growing in premium income. At the same time, the loss ratio has raised gradually. From 2005 to 2011, average loss ratio is 45.24% in Property and Liability insurance industry and 34.31% in Life insurance Industry. Property and Liability insurer’s underwriter must face the getting worsen loss ratio and look for something to do. The purpose of this paper is to examine execute underwriting guideline can reduce the adverse selection or not and personal features can influence group insurance’s decision-making factors or not. We complied data on group accident insurance from a Property and Liability Company in Taiwan from 2009 to 2010.There are 151,037 samples in personal features and 4,504 samples in group features, the 2009 data as contrast group and the 2010 data as a experiment group. We use ordered logistic regression to analysis the phenomenon of adverse selection. The estimation results show that adverse selection exists in group accident insurance and execute underwriting guideline can improve the effect of adverse selection. The result of the analysis not only help underwriter to establish a sound underwriting system but also increase more underwriting profit.
Relation:	Proceedings of the 2013 International Conference in Management Sciences and Decision Making=2013年管理科學與經營決策國際學術研討會論文集
Appears in Collections:	[Department of Management Sciences] Proceeding

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