Expiration Dates in Automobile Insurance Contracts: The Curious Case of Last Policy Month Claims in Taiwan

Chu-Shiu Li (), Chwen-Chi Liu () and Sheng-Chang Peng ()
Additional contact information
Chu-Shiu Li: Department of International Business, Asia University, No. 500, Lioufeng Rd., Wufeng, Taichung, 41354, Taiwan.
Chwen-Chi Liu: Risk and Insurance Research Center, National Cheng-Chi University, No. 64, Sec.2, Chinan Rd., Taipei, 11605, Taiwan.
Sheng-Chang Peng: Department of Risk Management and Insurance, Feng Chia University, No. 100, Wenhwa Rd., Seatwen, Taichung, 40724, Taiwan.

The Geneva Risk and Insurance Review, 2013, vol. 38, issue 1, 23-47

Abstract: This paper investigates a widespread trend in the Taiwanese automobile insurance market in which the loss claims of vehicle damage insurance contracts have a high propensity to occur just before the end of the policy year (as opposed to calendar year). We show that certain uncommon characteristics of claim data are consistently observed in the last policy month. We indirectly show that there is a severe time-varying excess claim problem in this market. The major sources of excess claims can be explained by the bonus-malus system problem and the auto-dealer incentive issue.

Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.palgrave-journals.com/grir/journal/v38/n1/pdf/grir20123a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/grir/journal/v38/n1/full/grir20123a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:genrir:v:38:y:2013:i:1:p:23-47

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10713

Access Statistics for this article

The Geneva Risk and Insurance Review is currently edited by Michael Hoy and Nicolas Treich

More articles in The Geneva Risk and Insurance Review from Palgrave Macmillan, International Association for the Study of Insurance Economics (The Geneva Association) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().