Open Insurance implementation in markets with spatial differentiation

João Victor de Andrade

Revista Brasileira de Economia - RBE, 2024, vol. 78, issue 1

Abstract: This piece of work aims to describe insurance firms’ behavior in an open insurance environment. For this analysis, I built a model in which two firms are in the extremes ofa unitary line segment and compete for customers evenly distributed across the segment,with unknown accident probability. Firms invest in data and know-how to evaluate customer types properly. I then compare two scenarios: firms sharing their data on customersor not. When firms share data the total amount of data acquired increases, their profitsincrease and the customers’ final price decreases, which configures an improvement in general welfare

Date: 2024
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