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

Hans-Martin von Gaudecker and Carsten Weber (carsten.weber@bwl.uni-mannheim.de)
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Carsten Weber: Sonderforschungsbereich 504, Postal: L 13, 15, D-68131 Mannheim

No 07-07, Sonderforschungsbereich 504 Publications from Sonderforschungsbereich 504, Universität Mannheim, Sonderforschungsbereich 504, University of Mannheim

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.

Pages: 10 pages
Date: 2006-10-09
Note: Financial support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged.
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Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Mandatory Unisex Policies And Annuity Pricing: Quasi-Experimental Evidence From Germany (2006)
Working Paper: Mandatory unisex policies and annuity pricing: quasi-experimental evidence from Germany (2006)
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