The Risky Business of Insurance Pricing

W Viscusi

Journal of Risk and Uncertainty, 1993, vol. 7, issue 1, 117-39

Abstract: The factors influencing insurance pricing decisions are assessed using the ISO product liability ratemaking files for 1980-1984. The mean loss level has a strong positive effect on manual rates and premium rates/exposure. Evidence on a variety of ambiguity measures is more mixed. As a broad generalization, risk ambiguity lowers manual rates, which may reflect exclusion of large loss outliers as being unrepresentative. Risk ambiguity tends to have a positive effect on actual pricing decisions for particular policies, especially bodily injury lines and the interactive risk-ambiguity model. Copyright 1993 by Kluwer Academic Publishers

Date: 1993
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Persistent link: https://EconPapers.repec.org/RePEc:kap:jrisku:v:7:y:1993:i:1:p:117-39

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Journal of Risk and Uncertainty is currently edited by W. Kip Viscusi

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