Risk Classification with On-Demand Insurance

On-demand insurance is an innovative business model from the InsurTech space, which provides coverage for episodic risks. It makes use of a simple fact in a practical way: People differ in their frequency of exposure as well as the probability of loss. The extra dimension of heterogeneity can be used to screen the insured and shifts the utility-possibility frontier outwards. We provide a sufficient condition under which type-specific full insurance at the actuarially fair price is incentive compatible. We also show that our results hold for various real-world implementations of on-demand insurance

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Year of publication:	[2023]
Authors:	Braun, Alexander ; Häusle, Niklas ; Thistle, Paul D.
Publisher:	[S.l.] : SSRN
Subject:	Risikomodell \| Risk model \| Versicherung \| Insurance \| Risiko \| Risk \| Theorie \| Theory \| Risikomanagement \| Risk management \| Klassifikation \| Classification \| Clusteranalyse \| Cluster analysis