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Asymmetric Information in Automobile Insurance: Evidence from Driving Behavior

Mürmann, Alexander and Geyer, Alois and Kremslehner, Daniela (2019) Asymmetric Information in Automobile Insurance: Evidence from Driving Behavior. Journal of Risk and Insurance. pp. 1-27. ISSN 1539-6975

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Abstract

Based on a unique data set of driving behavior we test whether private in- formation in driving characteristics has significant effects on contract choice and risk in automobile insurance. We define a driving factor based on over- all distance driven, number of car rides, and speeding. Using local weather conditions, we account for the endogeneity of the driving factor. While this driving factor has an effect on risk, there is no significant evidence for se- lection effects in the level of third-party liability and first-party insurance coverage.

Item Type: Article
Divisions: Departments > Finance, Accounting and Statistics > Finance, Banking and Insurance
Departments > Finance, Accounting and Statistics > Financial Research
Version of the Document: Published
Depositing User: Gertraud Novotny
Date Deposited: 29 Jan 2019 11:55
Last Modified: 29 Jan 2019 11:55
Related URLs:
FIDES Link: https://bach.wu.ac.at/d/research/results/89214/
URI: http://epub.wu.ac.at/id/eprint/6807

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