Implications For Insurance Research Articles

Employer Screening and Optimal Unemployment Insurance

Abstract Field experiments show that employers are less likely to consider long-term unemployed job-seekers for interviews. We study the implications for optimal unemployment insurance (UI). Based on a structural model of job search and recruitment, estimated with German data, we analyse the optimal two-tier unemployment system. We find that screening makes the optimal initial benefit level four percentage points higher and the potential benefit duration seven months longer. Using an extended Baily-Chetty formula, we study the mechanisms through which screening affects the consumption smoothing gain and moral hazard cost of providing UI and highlight the role of the externality from endogenous firm behaviour.

Diagnostic value of serum thymus and activation-regulated chemokine (TARC) in fatal asthma

ObjectivesAsthma, a chronic inflammatory airway disease, is characterized by airway hyperresponsiveness and structural changes. Accurate postmortem diagnosis is crucial because of legal and insurance implications, necessitating differentiation from other causes of sudden death. Thymus and activation-regulated chemokine (TARC) is a chemokine that potentially acts as a biomarker of asthma. This study evaluated the diagnostic value of serum TARC combined with immunoglobulin E (IgE) levels as biomarkers in forensic settings. ResultsThe subjects were 100 autopsy cases, categorized into fatal asthma (n = 25), acute myocardial infarction (AMI) (n = 37), and traumatic deaths (n = 38). TARC levels were significantly elevated in asthma (525.68 ± 801.87 pg/mL) compared with AMI (180.35 ± 109.37 pg/mL) and trauma (173.26 ± 105.01 pg/mL) cases. Similarly, serum IgE levels were higher in asthma (3363.72 ± 7023.46 KU/L) than in AMI (130.92 ± 260.79 KU/L) and trauma (134.53 ± 195.41 KU/L) cases. ROC curve analysis showed that serum TARC had a sensitivity of 68.0 % and specificity of 73.6 % (AUC 0.763, cut-off value of 225 pg/mL). In comparison, serum IgE had a sensitivity of 80 % and specificity of 86.1 % (AUC 0.881, cut-off value of 307 KU/L). The combined use of TARC and IgE increased the diagnostic specificity to 95.8 %. ConclusionsSerum TARC and IgE are valuable biomarkers for diagnosing fatal asthma in forensic settings. While serum TARC levels correlate with Th2-mediated inflammation, the combined measurement of TARC and IgE enhances the diagnostic accuracy, providing significant specificity for confirming asthma diagnosis.

Limited Firm Insurance and Aggregate Implications

This paper studies the impacts of financial shocks on firm insurance, firm dynamics, and macroeconomic implications. A key departure from the literature is that firms provide wage insurance contracts to risk-averse workers in a long-term relationship. Such contracts endogenously impose a form of inflexible debt liability to firms, and make firms with limited financial net worth more vulnerable to shocks than others. In our model, firms have heterogenous productivity and financial net worth, and also firms face financial frictions. Search and matching in the labor market endogenously determines the value of wage contract, and thus the level of liability to the firm. We have three new findings: (1) The wage dynamics of the quantitative model are consistent with those in empirical studies, with significant insurance against firm-level idiosyncratic shocks, and also a weak comovement between aggregate wage and GDP when there are aggregate shocks. (2) Firms with limited financial resources are hit by financial shocks significantly more than others, with larger negative impacts on dividends, credit borrowing, firm value, and firm entry; the endogenous wage insurance also becomes more limited, and there are more separations. These impacts on both firms and workers are different from—and cannot be accounted for by—standard models with a representative firm or worker. (3) Quantitative exercises for the Great Recession in the United States suggest that aggregate productivity shocks and financial shocks play different roles; without financial shocks, we cannot account for the dynamics of financial variables, including the reduced credit borrowing, spikes in credit spreads, and large drops in dividend payments. Lastly, we provide microlevel empirical supports for our model implications. This paper was accepted by Lukas Schmid, finance. Funding: Y. Wang acknowledges the financial support from the National Natural Science Foundation of China [Grant 72150003] and the grant from Shenzhen Municipal Government [Grant 1210614103]. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2023.01627 .

Consumption dynamics and welfare under non-Gaussian earnings risk

Recent empirical studies document that the distribution of earnings changes displays substantial deviations from lognormality: in particular, earnings changes are negatively skewed with extremely high kurtosis (long and thick tails), and these non-Gaussian features vary substantially both over the life cycle and with the earnings level of individuals. Furthermore, earnings changes display nonlinear (asymmetric) mean reversion. In this paper, we embed a very rich “benchmark earnings process” that captures these non-Gaussian and nonlinear features into a lifecycle consumption-saving model and study its implications for consumption dynamics, consumption insurance, and welfare. We show four main results. First, the benchmark process essentially matches the empirical lifetime earnings inequality—a first-order proxy for consumption inequality—whereas the canonical Gaussian (persistent-plus-transitory) process understates it by a factor of five to ten. Second, the welfare cost of idiosyncratic risk implied by the benchmark process is between two-to-four times higher than the canonical Gaussian one. Third, the standard method in the literature for measuring the pass-through of income shocks to consumption—can significantly overstate the degree of consumption smoothing possible under non-Gaussian shocks. Fourth, the marginal propensity to consume out of transitory income (e.g., from a stimulus check) is higher under non-Gaussian earnings risk.

Preferential trade agreements as insurance

We investigate preferential trade agreement (PTA) formation when risk averse countries face demand uncertainty and, hence, have an insurance motive for pursuing trade integration. In this environment, when deciding which type of PTA − if any − they wish to form, countries seek to maximise their net welfare; that is, their expected utility less a risk premium. The desire for insurance influences, not just whether a particular PTA forms, but also the preferred depth of integration. We analyze the insurance implications of free trade agreements (FTAs), customs unions (CUs), and countries choosing to stand alone. We further distinguish between shallow CUs and deep CUs; in the former, members maximise the sum of their individual net welfares, while in the latter they maximise the net value of the sum of their individual expected welfares. We show that differences in country risk attitudes and the levels of risk they face, as well as the degree to which these risks are correlated with each other, each, and together, influence the formation and design of TAs. When countries’ demands are uncorrelated, they form a deep CU if their levels of risk aversion are sufficiently different. If, however, their risk attitudes are similar, countries opt for shallower trade integration − either a shallow CU or a FTA − if they face low levels of uncertainty, and choose to stand alone if one country faces a sufficiently high level of uncertainty. When countries’ demands are correlated, they tend to form a deep CU if their demands are strongly negatively correlated, a FTA if their demands are strongly positively correlated and a shallow CU when their demands are weakly correlated. Intuitively, differences in country risk attitudes (i.e., their degree of risk aversion) act as an additional source of comparative advantage. Deeper integration − particularly via a CU − permits less risk averse members to essentially export their relative partiality for risk to more risk averse partners, thereby effectively providing the latter with insurance.

Long-run consequences of informal elderly care and implications of public long-term care insurance

We estimate a dynamic structural model of labor supply, retirement, and informal caregiving to study short and long-term costs of informal caregiving in Germany. Incorporating labor market frictions and the German tax and benefit system, we find that in the absence of Germany’s public long-term insurance scheme, informal elderly care has adverse and persistent effects on labor market outcomes and, thus, negatively affects lifetime earnings and future pension benefits. These consequences of caregiving are heterogeneous and depend on age, previous earnings, and institutional regulations. Policy simulations suggest that while public long-term care insurance policies are fiscally costly and induce negative labor market effects, they can largely offset the personal costs of caregiving and increase welfare, especially for low-income individuals.

Australian researcher's perspectives on the Australian industry-led moratorium on genetic tests in life insurance.

Fear of insurance discrimination can inhibit genetic research participation. In 2019, an industry-led partial moratorium on using genetic results in Australian life insurance underwriting was introduced. This mixed-methods study used online surveys (n = 59 participants) and semi-structured interviews (n = 22 participants) to capture researchers' perceptions about the moratorium. 66% (n = 39/59) were aware of the moratorium before the survey. Of researchers returning genetic results, 56% (n = 22/39) reported that insurance implications were mentioned in consent forms, but a minority reported updating consent forms post-moratorium (n = 13/39, 33%). Most researchers reported that concerns regarding life insurers utilizing research results inhibited recruitment (35/59, 59%), and few perceived that the moratorium positively influenced participation (n = 9/39, 23%). These findings were supported by qualitative findings which revealed that genetic discrimination concerns were a major issue for some individuals, though these concerns could be eclipsed by the promise of a diagnosis through research participation. The majority thought a regulatory solution should be permanent (n = 34/51, 67%), have financial limits of at least ≥1,000,000 AUD (37/51, 73%), and involve government oversight/legislation (n = 44/51, 86%). In an era where an increasing number of research studies involve genomics as a primary or secondary objective, it is crucial that we have regulatory solutions to address participants' hesitation.

Availability of the seat belt defense: Implications for auto liability insurance

AbstractA “seat belt defense” allows a defendant in a third‐party auto liability event to present evidence of seat belt nonuse to reduce a plaintiff's recovery. When successfully applied, the defense has a direct effect on reducing liability payouts by insurers for accidents. Our analysis reveals that seat belt defense laws are associated with a 10% reduction in auto claims costs, which equates to a reduction in loss costs of approximately $14 per insured vehicle. We find little evidence that the defense reduces accident frequency and no evidence that the defense affects seat belt usage. The lack of a deterrent effect on driving behavior suggests that the availability of the defense is not salient to drivers. The reduction in loss costs supports the notion that defense lawyers are aware of the defense and make use of it. The resulting effect of lowering insurance payouts may alleviate increasing auto insurance costs.

Publisher Correction: IT service outage cost: case study and implications for cyber insurance

Publisher Correction: IT service outage cost: case study and implications for cyber insurance

Multi-Criterial Model for Weighting Biological Risk Factors in Multiple Sclerosis: Clinical and Health Insurance Implications.

The etiology of Multiple Sclerosis (MS) remains undetermined. Its pathogenic risk factors are thought to play a negligible role individually in the development of the disease, instead assuming a pathogenic role when they interact with each other. Unfortunately, the statistical weighting of this pathogenic role in predicting MS risk is currently elusive, preventing clinical and health insurance applications. Here, we aim to develop a population-based multi-criterial model for weighting biological risk factors in MS; also, to calculate the individual MS risk value useful for health insurance application. Accordingly, among 596 MS patients retrospectively assessed at the time of diagnosis, the value of vitamin D < 10 nm/L, BMI (Body Mass Index) < 15 Kg/m2 and >30 Kg/m2, female sex, degree of family kinship, and the range of age at onset of 20-45 years were considered as biological risk factors for MS. As a result, in a 30-year-old representative patient having a BMI of 15 and second degree of family kinship for MS, the major developmental contributor for disease is the low vitamin D serum level of 10 nm/L, resulting in an MS risk of 0.110 and 0.106 for female and male, respectively. Furthermore, the Choquet integral applied to uncertain variables, such as biological risk factors, evidenced the family kinship as the main contributor, especially if coincident with the others, to the MS risk. This model allows, for the first time, for the risk stratification of getting sick and the application of the health insurance in people at risk for MS.

Mapping marine insurance: a bibliometric review: a taxonomical study using bibliometric visualization and systematic analysis

This study aims to identify the current trends in the literature on marine insurance by applying a bibliometric review of documents published in the Scopus database. This analysis was based on the most cited papers, most influential authors, countries, and organizations, as well as the most frequent keywords. In addition, qualitative content analysis was conducted. It reviewed 293 documents on marine insurance. Bibliometric analysis was performed using VOSviewer, and qualitative content analysis was performed using WordStat. The results identify three major clusters: (1) risk assessment, (2) marine insurance, and (3) the insurance industry. This paper also presents recommendations for future research in this field. The findings of this study have implications for marine insurance, such as new developments to be implemented in the insurance industry to enhance its efficiency. This study is the first to review marine insurance publications that can be largely used for insurance practices. This study provides an overview of how the literature on marine insurance research has developed, as well as a summary of the most influential authors, along with countries, organizations, and journal sources. This offers an opportunity for future research to focus on this topic.

The Insurance Implications of Government Student Loan Repayment Schemes

We use new administrative data that link detailed information on Canadian student loan recipients with their repayment and income histories from the Canada Student Loans Program, income tax filings, and postsecondary schooling records to measure the extent to which student borrowers adjust loan repayments to insure against income variation. Loan payments are shown to increase in income, more so in early years and for individuals with higher initial debt. We estimate that on average an unexpected $1,000 change in annual income is associated with a $30 change in loan payment. Loan repayments are also used to absorb persistent income variation.

Psychosocial factors impacting barriers and motivators to cancer genetic testing.

Only a small proportion of patients who qualify for clinical genetic testing for cancer susceptibility get testing. Many patient-level barriers contribute to low uptake. In this study, we examined self-reported patient barriers and motivators for cancer genetic testing. A survey comprised of both new and existing measures related to barriers and motivators to genetic testing was emailed to patients with a diagnosis of cancer at a large academic medical center. Patients who self-reported receiving a genetic test were included in these analyses (n= 376). Responses about emotions following testing as well as barriers and motivators prior to getting testing were examined. Group differences in barriers and motivators by patient demographic characteristics were examined. Being assigned female at birth was associated with increased emotional, insurance, and family concerns as well as increased health benefits compared to patients assigned male at birth. Younger respondents had significantly higher emotional and family concerns compared to older respondents. Recently diagnosed respondents expressed fewer concerns about insurance implications and emotional concerns. Those with a BRCA-related cancer had higher scores on social and interpersonal concerns scale than those with other cancers. Participants with higher depression scores indicated increased emotional, social and interpersonal, and family concerns. Self-reported depression emerged as the most consistent factor influencing report of barriers to genetic testing. By incorporating mental health resources into clinical practice, oncologists may better identify those patients who might need more assistance following through with a referral for genetic testing and the response afterwards.

Crop Insurance Implications of Permanently Authorizing the Emergency Relief Program

AbstractThe United States has a long history of providing ad hoc disaster assistance to agricultural producers. The latest version – the Emergency Relief Program (ERP) – follows five consecutive years of appropriations for disaster assistance. In response to ongoing appropriations, there is growing interest in establishing a permanent disaster program. However, with that comes concerns over the impact it could have on the existing farm safety net, particularly crop insurance. In this paper, we characterize the likely effects on crop insurance coverage levels of a permanent authorization of ERP. We assume that corn and soybean producers choose a coverage level based on the effects of that choice on the distribution of future ending wealth reflecting crop revenue, insurance indemnities, and ERP payments. We find very modest effects on crop insurance coverage level choices and crop insurance premiums collected.

Firm Accommodation after Disability: Labor Market Impacts and Implications for Social Insurance

Firm Accommodation after Disability: Labor Market Impacts and Implications for Social Insurance

Long-Run Consequences of Informal Elderly Care and Implications of Public Long-Term Care Insurance

Long-Run Consequences of Informal Elderly Care and Implications of Public Long-Term Care Insurance

Long-Run Consequences of Informal Elderly Care and Implications of Public Long-Term Care Insurance

Long-Run Consequences of Informal Elderly Care and Implications of Public Long-Term Care Insurance

Germline BRCA testing in pancreatic cancer: improving awareness, timing, turnaround, and uptake.

Prognosis is generally poor for patients with pancreatic ductal adenocarcinoma. However, patients with germline BRCA1 or BRCA2 mutations (gBRCAm) may benefit from first-line platinum-based chemotherapy and maintenance therapy with the poly(adenosine diphosphate-ribose) polymerase inhibitor olaparib following at least 16 weeks of first-line platinum-based chemotherapy without disease progression. Germline breast cancer gene (BRCA) testing is therefore important to ensure that patients receive the most effective treatment. In addition, testing for other DNA damage response gene mutations beyond gBRCAm may also guide treatment decisions. However, clinical pathways for genetic testing are often suboptimal, leading to delays in treatment initiation or missed opportunities for personalized therapy. Barriers to testing include low rates of referral and uptake, delays to referral and slow result turnaround times, cost, and biopsy and assay limitations if somatic testing is performed, leading to the requirement for subsequent dedicated germline testing. Low rates of referral may result from lack of awareness among physicians of the clinical value of testing, coupled with low confidence in interpreting test results and poor availability of genetic counseling services. Among patients, barriers to uptake may include similar lack of awareness of the clinical value of testing, anxiety regarding the implications of test results, lack of insurance coverage, fear of negative insurance implications, and socioeconomic factors. Potential solutions include innovative approaches to testing pathways, including 'mainstreaming' of testing in which BRCA tests are routinely arranged by the treating oncologist, with the involvement of genetic counselors if a patient is found to have a gBRCAm. More recently, the utility of multigene panel analyses has also been explored. Access to genetic counseling may also be improved through initiatives such as having a genetic counseling appointment for all new patient visits and telemedicine approaches, including the use of telephone consultations or DVD-assisted counseling. Educational programs will also be beneficial, and cost effectiveness is likely to improve as the number of targeted treatments increases and when the earlier detection of tumors in family members following cascade testing is considered.

Black box technology, usage-based insurance, and prediction of purchase behavior: Evidence from the auto insurance sector

Disruptive technologies are changing the car insurance sector, with behavioral and adaptive impacts for individuals as well as organizations. An innovative factor in this industry is connected to telematics and concerns the installation of a small device called a ‘black box’, which is becoming more and more widespread, with consequent financial impacts on the insurance policy market. However, the psychological drivers that underpin consumers' intentions to purchase black box auto insurance are scarcely researched. To fill this gap, we used a mixed-methods sequential exploratory design to analyze a sample of 757 consumers. Our results, obtained through PLS-SEM, highlight that attitude, awareness, subjective norms, risk perception, and trust have a significant positive influence on consumers' intentions to purchase black box technology auto insurance, while the effect of perceived behavioral control is not supported. Furthermore, the blindfolding analysis underscores the predictive relevance of the model. Our results have important implications for auto insurance companies interested to better understand consumers' needs and motives in relation to the purchase of black box insurance.

Ethical, legal, and sociocultural challenges of genomic research in Jordan: a mixed methods study in patients with breast cancer with Jordanian–Palestinian heritage

BackgroundBreast cancer is a leading cause of morbidity and mortality in women worldwide. At King Hussein Cancer Center (KHCC), Amman, Jordan, 38% of breast cancer diagnoses are in women younger than 45 years, which might reflect a high prevalence of hereditary breast cancer. The aim of this study was to assess the contribution of germline mutations in BRCA1 and BRCA2 to breast cancer treated at KHCC. We also describe our experience in dealing with this delicate cultural issue in a tribal-based country with Palestinian–Jordanian family origins. MethodsPatients treated at KHCC with stage I–IV breast cancer, with a high-risk profile according to US National Comprehensive Cancer Network guidelines, were invited to participate. Patients were interviewed for consent and had full autonomy to decide whether they wanted to know their test result, inform their treating physician, or have a copy of the result placed in their charts. Charts were reviewed for clinical data and tumour pathology. A 10 mL blood sample was obtained for DNA extraction. A detailed three-generation family history was obtained. BRCA sequencing was done at the Myriad Genetics laboratory using BRCAnalysis. BRCA mutations were classified as deleterious, suspected deleterious, variant of uncertain significance (VUS), or favour polymorphism (harmless). The report received for each mutation result contained a detailed description of level of risk associated with the involved variant and estimated lifetime risk of breast and ovarian cancer, risk of second breast cancer or subsequent ovarian cancer, and risk of cancer to first, second, and third-degree family members. Patients were invited to an ad-hoc clinic with the treating physician for disclosure of results and counselling about estimated cancer risk to patient and relatives. Interviews with patients were summarised as text and qualitiative analysis for common themes was done. Challenges encountered during patient consent and disclosure of results were documented, as well as proposed solutions. Ethical approval was granted by the KHCC Institutional Review Board (no 11 KHCC 63). FindingsThe first 102 patients to meet inclusion criteria were invited to participate in the study, of whom 100 enrolled and provided written informed consent. Two patients declined to participate (a response rate of 98%). Six participants were residents of the West Bank and treated at KHCC, and 66 were from families of Palestinian origin residing in Jordan. The remaining patients were Jordanians. Median age was 40 years (range 22–75). 20 patients had deleterious mutations and seven had suspected deleterious mutations in BRCA1 and BRCA2 genes. Seven VUS were detected. All patients with BRCA1 and BRCA2 mutations had a significant family history of breast or ovarian cancer. Nevertheless, many patients with a significant family history (62 of 100) tested negative for BRCA1 and BRCA2 mutations. Many ethical dilemmas were highlighted during patient encounters, mainly relating to the guarantee of confidentiality and privacy in a tribal-based culture, fears of false reassurance, autonomy versus beneficence, and the bounds of physician–patient confidentiality when relatives are at genetic risk of cancer. Potential insurance, employment, and social discrimination implications were also addressed with the patients before testing and in more detail after disclosure of positive mutation results, which flagged a legal void in local genetic testing and data protection regulations. InterpretationOur cohort showed an important incidence of deleterious and suspected deleterious BRCA1 and BRCA2 mutations, suggesting that genetic testing should be discussed and offered to patients with high-risk features. Many high-risk patients tested negative for BRCA1 and BRCA2 mutations, therefore future studies should aim to test for mutations in other breast cancer susceptibility genes (eg, CHEK2, PALB2, and BRIP1). Running culturally sensitive genetic research in a country with limited resources is a challenging exercise and highlights the urgent need for guiding regulations. We recommend establishing a clinical cancer genetics programme, through which unaffected family members would benefit from early breast cancer screening and appropriate risk-reduction measures. FundingSister Institution Network Fund of MD Anderson Cancer Center and KHCC.