Institut für Haushalts- und Konsumökonomik (bis 2010)

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Contract design and insurance fraud : an experimental investigation
(2010) Schiller, Jörg; Lammers, Frauke
This paper investigates the impact of insurance contract design on the behavior of filing fraudulent claims in an experimental setup. We test how fraud behavior varies for insurance contracts with full coverage, a straight deductible or variable premiums (bonus-malus contract). In our experiment, filing fraudulent claims is a dominant strategy for selfish participants, with no psychological costs of committing fraud. While some people always commit fraud, a substantial share of people only occasionally or never defraud. In addition, we find that deductible contracts may be perceived as unfair and thus increase the extent of claim build-up compared to full coverage contracts. In contrast, bonus-malus contracts with variable insurance premiums significantly reduce the filing of fictitious claims compared to both full coverage and deductible contracts. This reduction cannot be explained by monetary incentives. Our results indicate that contract design significantly affects psychological costs and, consequently, the extent of fraudulent behavior of policyholders.
Intermediation and matching in insurance markets
(2009) Schiller, Jörg; Focht, Uwe; Richter, Andreas
This paper addresses the role of independent insurance intermediaries in markets where matching is important. A controversial matter in the discussion concerning insurance intermediation is the issue of compensation customs and how the latter affect prices, rents and advice quality in insurance markets. This work compares a fee-based with a commission-based system. We show that in a situation with a non-strategic intermediary both remuneration systems are payoff-equivalent. In a second step, allowing for strategic behavior, we discuss the impact of remuneration on the quality of advice. The analysis shows that the possibility of mismatching can provide the intermediary with substantial market power which however does not translate into mismatching as long as consumers have rational expectations. We o¤er a rationale for the use of contingent commissions. In addition, this paper addresses whether or not the recent ban of any commission payments as introduced in countries such as Denmark and Finland is an appropriate market intervention.
The welfare state evolves : German Knappschaften, 1854 - 1923
(2010) Jopp, Tobias Alexander
This paper reviews the German miners? model of mutual insurance from its introduction in 1854 to its basic reformation in 1923. Its core feature was the provision of cash benefits for compensation of income losses due to temporary sickness and permanent invalidity or death of the bread-winner. The carriers of the insurance scheme, the Knappschaften, date back to medieval times, and the Knappschaft is still present today as the second pillar of the German statutory old-age insurance. This paper aims to establish the Knappschaft insurance?s main characteristics in the period under consideration. These include, for example, compulsory membership, shared financing between employed miners and entrepreneurs, selfmanagement, financing based on earnings-related social insurance contributions, a strong emphasis of the insurance principle, and application of the pay-as-you-go mechanism. The organisational analysis is complemented quantitatively, on the one hand, by evidence on increasing generosity and, on the other hand, evidence on increasing financial distress substantiating the shadow side of a maturing pay-as-you-go based scheme. In particular, Knappschaften experienced all trends we commonly associate with today?s systems in the second half of the 20th century as early as in the 19th century, even before the Bismarckian insurance was installed from 1883 on: Increasing social security spending, rising pensioners-tocontributors ratios, concentration and pressure on finances forcing Knappschaften to adjust their fiscal policy according to the mechanics of pay-as-you-go.

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