Moral Hazard and Experience Rating: an Empirical Analysis

For Many Years, Economists and Actuaries Have Studied Multiperiod Insurance Contracts Independently and Differently. This Paper Presents a First Empirical Economic Study on Moral Hazard and Experience Rating While Making Reference to Previous Empirical Actuarial Studies. the First Objective Is to Verify Empirically the Proposition That Past Experience Is a Good Predictor of Risk by Using Data From a Random Sample Consisting of 19 013 Drivers. the Second Objective Is to Use the Results to C Construct a Pricing Formula for Automobile Insurance in the Spirit of Rubinstein-Yaari (1983).