Traditionally insurance agents are incentivised by payment of a commission on the premium they generate. A bonus payment received by the agent from the insurer, when the insured does not make a claim, is referred to as ‘No claim bonus' (NCB). NCB rewards the agent for her / his effort in...

Unlike sophisticated institutional insurance buyers, individual insurance seekers often use simple heuristic tools for risk management purposes, such as requiring that an insurance arrangement will not result in a retained loss that exceeds a certain predetermined and fixed level. In this paper,...

We re-examine the problem of budget-constrained demand for insurance indemnification when the insured and the insurer disagree about the likelihoods associated with the realizations of the insurable loss. For ease of comparison with the classical literature, we adopt the original setting of...

We re-visit the problem of optimal insurance design under Rank-Dependent Expected Utility (RDEU) examined by Bernard et al. (2015), Xu (2018), and Xu et al. (2015). Unlike the latter, we do not impose the no sabotage condition on admissible indemnities, that is, the comonotonicity of indemnity...

The standard economic analysis of the insured-insurer relationship under moral hazard postulates a simplistic setup that hardly explains the many features of an insurance contract. We extend this setup to include the situation that the insured was facing at the time of the accident and the...

We show that on-demand insurance contracts, an innovative form of coverage recently introduced through the InsurTech sector, can serve as a screening device. To this end, we develop a new adverse selection model consistent with Wilson (1977), Miyazaki (1977) and Spence (1978). Consumers have...

The annuity market in the US has been historically small. What drives this fact? The annuity market could be small because of adverse selection or supply-side frictions in insurance markets. Identifying demand- and supply-side frictions is difficult without data separately measuring exogenous...

Arrow's classical result on the optimality of the deductible indemnity schedule holds in a situation where the insurer is a risk-neutral Expected-Utility (EU) maximizer, the insured is a risk-averse EU-maximizer, and the two parties share the same probabilistic beliefs about the realizations of...

In Arrow's classical problem of demand for insurance indemnity schedules, it is well-known that the optimal insurance indemnification for an insurance buyer - or decision maker (DM) - is a deductible contract, when the insurer is a risk-neutral Expected-Utility (EU) maximizer and when the DM is...