The Effect of Political Frictions on the Pricing and Supply of Insurance

IF 6.8 1区经济学 Q1 BUSINESS, FINANCE

Review of Financial Studies Pub Date : 2023-09-12 DOI:10.1093/rfs/hhad073

Jessica Liu, Weiling Liu

引用次数: 0

Abstract

Political frictions significantly affect both pricing and supply in the long-term care insurance (LTCI) market. Comparing the same insurer’s requests submitted for the same policy at the same time to different state regulators, we find that they are 13% more likely to be approved and receive 4% more of the requested amount after an election year. Over time, regulatory pushback on premium increase requests leads to persistently lower cash reserves and increases the probability of company dropout. An insurer who receives one-standard-deviation less of their requested increase is 20% more likely to leave the market next year.

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政治摩擦对保险定价和供给的影响

政治摩擦显著影响长期护理保险(LTCI)市场的定价和供应。比较同一保险公司在同一时间向不同州的监管机构提交的同一保单申请，我们发现，在选举年之后，他们获得批准的可能性要高出13%，收到的申请金额要高出4%。随着时间的推移，监管机构对提高保费要求的抵制导致现金储备持续下降，并增加了公司退出的可能性。如果保险公司的保费增长比他们要求的少一个标准差，那么明年离开市场的可能性就会增加20%。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Review of Financial Studies Multiple-

CiteScore

16.00

自引率

2.40%

发文量

期刊介绍： The Review of Financial Studies is a prominent platform that aims to foster and widely distribute noteworthy research in financial economics. With an expansive editorial board, the Review strives to maintain a balance between theoretical and empirical contributions. The primary focus of paper selection is based on the quality and significance of the research to the field of finance, rather than its level of technical complexity. The scope of finance within the Review encompasses its intersection with economics. Sponsoring The Society for Financial Studies, the Review and the Society appoint editors and officers through limited terms.