The utility of deductibles from the insurer's point of view (Q2266335)
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English | The utility of deductibles from the insurer's point of view |
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The utility of deductibles from the insurer's point of view (English)
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1985
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The relationships between the premiums for deductible cover and for full cover are analyzed with respect to the utility for the insurer. Theorem 1 shows that within natural bounds for the premiums neither form of coverage is generally preferred by all insurers. Theorems 2-4 indicate that in many realistic cases a deductible cover requires a higher risk loading factor by the insurer than a full insurance cover. Theorem 2(b) also contains an exception to this rule.
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premium loading factor
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principle of zero utility
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deductible cover
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full cover
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risk loading factor
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