Mandatory unisex policies and annuity pricing: quasi-experimental evidence from Germany

Hans-Martin von Gaudecker and Carsten Weber

No 07-07, Papers from Sonderforschungsbreich 504

Abstract: We analyse the effect of abolishing gender-based categorisation of risks on the pricing of annuity contracts. Under the absence of screening activities, we find clear evidence of insurers expecting strong adverse selection effects. In particular, most of the unisex contracts’ payouts closely resemble those from women’s policies before the reform. Hence the policy target is not met and there are large efficiency losses for men. We conclude that there seems to be little hope for unisex policies to meet their equity objectives if consumers can react on the extensive margin, unless subsidies are extremely large.

Date: 2006
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Related works:
Working Paper: Mandatory Unisex Policies And Annuity Pricing: Quasi-Experimental Evidence From Germany (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:mnh:spaper:2560

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