Estimating the effect of a change in insurance pricing regime on accidents with endogenous mobility

Georges Dionne and Benoit Dostie ()

No 07-11, Cahiers de recherche from HEC Montréal, Institut d'économie appliquée

Abstract: In this paper, we estimate the impact of introducing a bonus-malus system on the probability of having automobile accidents, taking into account contract duration or the client mobility between insurers. We show that the new incentive scheme reduces accident rates of all policyholders when contract duration is taken into account, but does not affect accident rates of movers that shirk the imposed incentive effects of the new insurance pricing scheme.

Keywords: Bonus-malus; contract duration; automobile accident; Poisson distribution; right- and left-censoring; exponential distribution. (search for similar items in EconPapers)
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Date: 2007-09
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Related works:
Working Paper: Estimating the Effect of a Change in Insurance Pricing Regime on Accidents with Endogenous Mobility (2007)
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Persistent link: http://EconPapers.repec.org/RePEc:iea:carech:0711

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