Asymmetric information on risky behaviour: Evidence from the automobile insurance market

Publisher's full text
Sara Forsstedt

This paper examines the Swedish automobile insurance market by accounting for policyholders' private information on risky behaviour in terms of major and minor traffic violations. Two approaches are used: A positive correlation test and a test where private information is used explicitly. The results show that there is a positive correlation, which is not affected when including private information in the regression, that policyholders with private information on risky behaviour are less likely to purchase full coverage, and that speeders follow a varying pattern. The conclusion is that it is favourable to use private information explicitly when asymmetric information is considered, rather than base the conclusion solely on the correlation test.

MEET US


7
Dec

Shipping and the environment – research meets reality

Centre for Transport Studies (CTS) in co-operation with Ports of Stockholm invite you to the seminar Shipping and the environment – research meets reality.

LATEST NEWS


2017-10-26

Simulation of cut-in by manually driven vehicles in platooning scenarios

A study in a VTI-driving simulator has showed that a platoon will be able to handle a cut in from a manually driven car. The results of this study have recently been presented at two conferences in Japan.


2017-10-16

ERPUG Forum

The five-year anniversary of European Road Profile Users' Group (ERPUG) Forum will take place at Ramboll head quarter, Copenhagen, Denmark October 19-20, 2017.


2017-09-29

Self-driving buses in Sweden next year?

A self-driving, fossil-free bus. This idea might become reality through a forthcoming collaborative project involving the Swedish National Road and Transport Research Institute (VTI), Linköping University and several other participants. The project group aim...


2017-09-29

New climate-proof solutions for hard surfaces in cities

High-density road infrastructure that emphasise maximum durability and minimum maintenance create inflexible systems, which put increased stress on urban trees and lead to increased risk for flooding. Over the past five years, the ‘Climate-proof solutions for...


2017-09-29

VTI is preparing for automated vehicles

Automation of traffic systems will lead to major changes. The European Union’s (EU) CoEXist research project began in June 2017 with the aim of preparing cities and road operators for the introduction of self-driving vehicles. The Swedish National Road and...


2017-07-05

Vehicle Driver Monitoring: sleepiness and cognitive load

To prevent road crashes it is important to understand driver related contributing factors, which have been suggested to be the critical reason in 94 per cent of crashes. The overall aim of the project Vehicle Driver Monitoring has been to advance the...