TY - JOUR
T1 - Who is changing health insurance coverage? Empirical evidence on policyholder dynamics
AU - Christiansen, Marcus
AU - Eling, Martin
AU - Schmidt, Jan-Philipp
AU - Zirkelbach, Lorenz
PY - 2015
Y1 - 2015
N2 - Long-term health insurance contracts provide policyholders with the option of lapsing coverage or switching to another tariff within the same insurance company. We empirically analyze policyholder behavior regarding contract commitment in a large data set of German private health insurance contracts. We show that short-term as well as long-term premium development, along with premium adjustment frequency, affect lapse and tariff switch rates. Moreover, the sales channel has a strong impact on switching behavior, indicating that policyholder choice is not fully independent of sales representatives. Our results are important for risk assessment and risk management of portfolios of health insurance contracts and provide better understanding of the dynamics of policyholder behavior in health insurance.
AB - Long-term health insurance contracts provide policyholders with the option of lapsing coverage or switching to another tariff within the same insurance company. We empirically analyze policyholder behavior regarding contract commitment in a large data set of German private health insurance contracts. We show that short-term as well as long-term premium development, along with premium adjustment frequency, affect lapse and tariff switch rates. Moreover, the sales channel has a strong impact on switching behavior, indicating that policyholder choice is not fully independent of sales representatives. Our results are important for risk assessment and risk management of portfolios of health insurance contracts and provide better understanding of the dynamics of policyholder behavior in health insurance.
U2 - 10.1111/jori.12053
DO - 10.1111/jori.12053
M3 - Article
SN - 0022-4367
JO - Journal of Risk and Insurance
JF - Journal of Risk and Insurance
ER -