Who is Changing Health Insurance Coverage? Empirical Evidence on Policyholder Dynamics

Marcus Christiansen (), Martin Eling, Jan-Philipp Schmidt () and Lorenz Zirkelbach ()

No 1223, Working Papers on Finance from University of St. Gallen, School of Finance

Abstract: Long-term health insurance contracts provide policyholders with the option of lapsing coverage or switching to another tariff within the same insurance company. We empirically analyze policyholder behavior regarding contract commitment in a large dataset of German private health insurance contracts. We show that short-term as well as long-term premium development, along with premium adjustment frequency, affect lapse and tariff switch rates. Moreover, the sales channel has a strong impact on switching behavior, indicating that policyholder choice is not fully independent of sales representatives. Our results are important for risk assessment and risk management of portfolios of health insurance contracts and provide better understanding of the dynamics of policyholder behavior in health insurance.

Pages: 26 pages
Date: 2012-12
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Journal Article: Who is Changing Health Insurance Coverage? Empirical Evidence on Policyholder Dynamics (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:usg:sfwpfi:2012:23

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