Update on the aging phenomenon steve d arcy sholom feldblum alma cohen
This presentation is the property of its rightful owner.
Sponsored Links
1 / 6

Update on the Aging Phenomenon Steve D’Arcy Sholom Feldblum Alma Cohen PowerPoint PPT Presentation


  • 47 Views
  • Uploaded on
  • Presentation posted in: General

Update on the Aging Phenomenon Steve D’Arcy Sholom Feldblum Alma Cohen. CAS Fall Meeting November 12, 2002 Boston, Massachusetts. Definition.

Download Presentation

Update on the Aging Phenomenon Steve D’Arcy Sholom Feldblum Alma Cohen

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Update on the aging phenomenon steve d arcy sholom feldblum alma cohen

Update on the Aging PhenomenonSteve D’ArcySholom FeldblumAlma Cohen

CAS Fall Meeting

November 12, 2002

Boston, Massachusetts


Definition

Definition

A cohort of property-liability insurance policies, all written as new business at the same time, experiences a gradually improving loss ratio as the policies undergo successive renewal cycles with an insurer.

This contrasts with the select-ultimate experience pattern of life insurance.


Primary empirical research

Primary Empirical Research

  • Dahlby 1983 Adverse Selection and Statistical Discrimination Journal of Public Economics

  • D’Arcy and Doherty 1990 The Aging Phenomenon and Insurance Prices PCAS

  • D’Arcy and Doherty 1990 Adverse Selection, Private Information and Lowballing in Insurance Markets Journal of Business

  • Feldblum 1996 Personal Automobile Premiums: An Asset Share Pricing Approach for Property/Casualty Insurance PCAS

  • Cohen 2001 Asymmetric Information and Learning in the Automobile Insurance Market (Working Paper)


Explanations for the aging phenomenon

Explanations for the Aging Phenomenon

  • Accumulation of private information

  • Business more accurately classified

  • Underwriting – high risk policies cancelled

    • However, aging occurs where renewal underwriting is restricted

  • High maintenance policyholders become dissatisfied with service and leave


New developments

New Developments

  • Extensive dataset of company experience

    • Alma Cohen’s research

  • CLUE (Comprehensive Loss Underwriting Exchange)

    • Appears to lower initial loss ratios and reduce level of improvement

  • Aging Phenomenon in DFA models

    • Allows study of optimal growth rates


  • Login