The Risky Business of Insurance Pricing

W Viscusi

A chapter in Making Decisions About Liability And Insurance, 1993, pp 117-139 from Springer

Abstract: 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.

Keywords: insurance pricing; decision making; risk; ambiguity (search for similar items in EconPapers)
Date: 1993
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DOI: 10.1007/978-94-011-2192-7_8

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