Insurance Research Articles

Mutual aid insurance with a three-state Markov chain

ABSTRACT Mutual aid insurance is a collective type of insurance where the policyholders share the potential losses or risks that they may face. In this paper, we establish a mathematical structure for mutual aid insurance through a three-state (good, bad and death) process, which is driven by an inhomogeneous Markov chain. The objective of maximizing an individual's lifetime utility is achieved by addressing a stochastic control problem that involves both mutual aid insurance and life insurance. We obtain the explicit expressions for optimal consumption, investment strategies, and life insurance premiums by employing the corresponding Hamilton-Jacobi-Bellman equation. In the end, we carry out a numerical analysis to show the significance of mutual aid insurance and demonstrate the optimal mutual aid insurance premium.

Disparities in cause-specific mortality by health insurance type and premium: evidence from Korean NHIS-HEALS cohort study, 2002–2019

BackgroundAlthough one’s socioeconomic status affects health outcomes, limited research explored how South Korea’s National Health Insurance (NHI) system affects mortality rates. This study investigated whether health insurance type and insurance premiums are associated with mortality.MethodsBased on the National Health Insurance Service-Health Screening cohort, 246,172 men and 206,534 women aged ≥ 40 years at baseline (2002–2003) were included and followed until 2019. Health insurance type was categorized as employee-insured (EI) or self-employed-insured (SI). To define low, medium, and high economic status groups, we used insurance premiums at baseline. Death was determined using the date and cause of death included in the cohort. Cox proportional hazard models were used to analyze the association between insurance factors and the overall and cause-specific mortality.ResultsThe SI group had a significantly higher risk of overall death compared to the EI group (adjusted hazard ratio (HR) [95% confidence interval]: 1.13 [1.10–1.15] for men and 1.18 [1.15–1.22] for women), after adjusting for various factors. This trend extended to death from the five major causes of death in South Korea (cancer, cardiovascular disease, cerebrovascular disease, pneumonia, and intentional self-harm) and from external causes, with a higher risk of death in the SI group (vs. the EI group). Further analysis stratified by economic status revealed that individuals with lower economic status faced higher risk of overall death and cause-specific mortality in both sexes, compared to those with high economic status for both health insurance types.ConclusionThis nationwide study found that the SI group and those with lower economic status faced higher risk of overall mortality and death from the five major causes in South Korea. These findings highlight the potential disparities in health outcomes within the NHI system. To address these gaps, strategies should target risk factors for death at the individual level and governments should incorporate such strategies into public health policy development at the population level.Trial registrationThis study was approved by the Institutional Review Board of Chungbuk National University Hospital (CBNUH-202211-HR-0236) and adhered to the principles of the Declaration of Helsinki (1975).

Research on extreme weather insurance and real estate decision model based on AHP-EWM-CVM and K-Means clustering technology

Aiming at the challenge of extreme weather to insurance industries and real estate industries, this paper constructs an insurance model and a real estate decision model. The insurance model uses analytic hierarchy Process (AHP), entropy weight method (EWM), coefficient of variation method (CVM) and K-Means clustering algorithm to evaluate the risk level in different regions and predict the values of risk indicators up to the year 2035, and then calculate future insurance premiums. At the same time, multiple constraints are used to determine the future risk safety interval, which provides the basis for insurance companies to make decisions. In the case application, this paper finds that China is currently medium risk region and will be a medium risk region in the future, and obtains the time point when insurance companies can underwrite policies in this region. In addition, this paper also constructs a real estate decision model, which comprehensively considers three factors: risk, development potential and risk cost, and provides decision making basis for real estate developers through GE matrix. In the case application, this paper predicts that in the next nearly ten years, China is a medium willingness and medium risk area, suggesting that real estate developers should be cautious in deciding whether to develop. This study provides decision support for insurance industries and real estate industries to deal with extreme weather, which is of theoretical and practical significance.

Low-Code No-Code Approach to Build Applications for P and C Insurance Carriers

Low-Code No-Code Approach to Build Applications for P and C Insurance Carriers

The Roles of Insurance on Economic Growth in Malaysia: An ARDL Approach

Malaysia’s economic growth has been rising steadily over the years and one of the main contributors is the insurance sector. The literature has recorded mixed findings on the relationship between insurance and economic growth. This paper examines the relationship between the insurance sector and economic growth in Malaysia over an extended period of 1990-2021. This paper uses three proxies for the insurance sector i.e. life insurance premiums, nonlife insurance premiums, and total insurance premiums. The Autoregressive-Distributed Lag (ARDL) and Error Correction Model (ECM) approaches are employed to achieve the objective. While controlling for foreign direct investment, export, and import, this paper found that there is a positive long-run relationship between non-life insurance premiums and economic growth. Conversely, a negative short-run relationship is observed between life insurance premiums and economic growth. The total insurance premium has a negative short-run relationship with economic growth yet is insignificant for the long-run. The non-life insurance sector has a larger contribution compared to life insurance on Malaysia's economic growth as the market depends more on capital formation and investments, particularly in infrastructure, real estate, and capital markets. The insurance sector provides financial expansion in terms of payment for protection which results in an economic boost.

Health insurance plans offered at NCI-designated cancer centers.

9052 Background: The health insurance landscape in the US represents an expensive and complex challenge to patients and physicians alike. Little is known about health insurance plans (HIPs) offered to physicians, particularly at NCI-designated cancer centers, which represent centers seeking to meet the highest standards. Methods: We collected data on the HIPs offered to physicians at NCI-designated cancer centers by reviewing institution websites from 11/2023 - 01/2024. We abstracted data on the insurance premium, deductible, out-of-pocket (OOP) maximum, and coinsurance for hospitalizations, limited to three HIPs per institution. We derived estimates using the lowest charge. We calculated inpatient stay costs based on standard hospital stay costs ($2,883 per day over an average of 4.5 days). We compared HIPs between public and private cancer centers. We used US Census Bureau population density data and regression models to explore associations among population density and OOP costs. Results: Among 65 NCI-designated cancer centers reviewed, 61 (93.8%) had readily available information about HIPs provided. Most institutions provided HIPs for all hospital employees, while 2 institutions only covered physicians. On average, each cancer center offered 3.67 HIPs, involving 1.67 insurers (54.1% offered a single insurer). Among 153 HIPs overall, 51.6% were preferred provider organization (PPOs) and one-third (33.3%) were health maintenance organization (HMOs). Only 22.9% of HIPs were high-deductible health plans (HDHP). The majority of cancer centers offered PPO plans (75.4%), HMO plans (57.4%), HDHP plans (55.7%), and some (24.6%) offered other plans, such as point of service and exclusive provider organization. Average costs for different kinds of HIPs are presented in the Table. A higher percentage of public cancer centers provided HMOs (60.5% vs. 50.0%, p=0.76) and PPOs (84.3% vs. 60.5%, p=0.09) than private centers, yet differences did not reach significance. Centers located in regions with higher state population density were more likely to have higher HMO OOP costs (beta=2.72; p=.006) and lower PPO OOP costs (beta=-2.98; p=.012). Conclusions: We found that most NCI-designated cancer centers had readily available information about HIPs provided to physicians. For these centers, physicians had limited HIP options offered, particularly in private institutions, which offered fewer HMO and PPO plans. We also demonstrated associations among state population density and OOP max in HMO and PPO plans. Our study provides a current synopsis of HIPs and identifies disparities among them, contributing to a foundation for future research. [Table: see text]

Improving the Care and Cost of Treating Community-Acquired Stage 3 and 4 Decubitus Ulcers

Introduction The healthcare costs for treatment of community-acquired decubitus ulcers accounts for $11.6 billion in the United States annually. Patients with stage 3 and 4 decubitus ulcers are often treated inefficiently prior to reconstructive surgery while physicians attempt to optimize their condition (debridement, fecal/urinary diversion, physical therapy, nutrition, and obtaining durable medical goods). We hypothesized that hospital costs for inpatient optimization of decubitus ulcers would significantly differ from outpatient optimization costs, resulting in significant financial losses to the hospital and that transitioning optimization to an outpatient setting could reduce both total and hospital expenditures. In this study, we analyzed and compared the financial expenditures of optimizing patients with decubitus ulcers in an inpatient setting versus maximizing outpatient utilization of resources prior to reconstruction. Methods Encounters of patients with stage 3 or 4 decubitus ulcers over a 5-year period were investigated. These encounters were divided into two groups: Group 1 included patients who were optimized totally inpatient prior to reconstructive surgery; group 2 included patients who were mostly optimized in an outpatient setting and this encounter was a planned admission for their reconstructive surgery. Demographics, comorbidities, paralysis status, and insurance carriers were collected for all patients. Financial charges and reimbursements were compared among the groups. Results Forty-five encounters met criteria for inclusion. Group 1’s average hospital charges were $500,917, while group 2’s charges were $134,419. The cost of outpatient therapeutic items for patient optimization prior to wound closure was estimated to be $10,202 monthly. When including an additional debridement admission for group 2 patients (average of $108,031), the maximal charges for total care was $252,652, and hospital reimbursements were similar between group 1 and group 2 ($65,401 vs $50,860 respectively). Conclusions The data derived from this investigation strongly suggests that optimizing patients in an outpatient setting prior to decubitus wound closure versus managing the patients totally on an inpatient basis will significantly reduce hospital charges, and hence costs, while minimally affecting reimbursements to the hospital.

Ethnicity and health insurance disparities in rectal carcinoma.

e13732 Background: Ethnicity and insurance coverage affect healthcare delivery in rectal carcinoma (RC). RC pts (pts) with Medicaid or no insurance are more likely to present with distant stage RC compared to Medicare/private insurance pts, and have a worse prognosis even when stage is accounted for. To combat such issues, federal law requires that non-profit hospitals, which make up 58% of all community hospitals, to provide charity care, or financial assistance, to those eligible. As insurance status, ethnicity and race have been found to independently affect colon cancer care, we expect similar results for RC in our limited but diverse cohort. Methods: Trinitas Medical Center RWJBH is an urban, community hospital that predominantly treats a minority population and provides financial assistance to eligible underinsured pts. Due to this assistance, or Charity Care, we can provide access to cancer care for many who would not ordinarily have such means. With institutional IRB approval, we completed a retrospective chart review of 59 pts diagnosed with Stage I-IV RC from 2017-2023. We assessed ethnicity, insurance carriers and treatment choices. Results: We reviewed 59 pts with the following ethnic distribution: 22 Hispanic (H), 21 White (W), 11 Black (B) and 5 Asian (A) pts. The median age at diagnosis with RC was 57 in H, 64 in B, 71 in W and 71 in A pts. B pts were found to be diagnosed with more advanced disease: 36% at Stage III and 45% at Stage IV, with none diagnosed at Stage I or II. H pts had comparatively fewer distant stage diagnoses (23% at Stage III, 18% at Stage IV). Neoadjuvant chemotherapy and radiation therapy to 20 of 59 pts treated at our center, 15 of whom subsequently received surgery. Four of five of these declined surgical intervention post neoadjuvant therapy. H pts had the following primary insurance carriers: 36% Medicaid, 36% Medicare, 27% Charity care. 62% of W pts had Medicare and 14% Medicaid. 27% had B pts had Medicare, 27% Medicaid and 9% had Charity care. 50% of the 59 pts had Charity care, with most pts in this group being H. Conclusions: Research suggests that immigrants utilize healthcare facilities less than U.S. citizens and programs like Charity care may be underutilized. In our RC cohort, 38 of 59 (64%) pts were racial minorities, of these 50% received Charity care. Most did not receive screening prior to a diagnosis of rectal cancer and many applied for Charity Care only after their diagnosis. Despite offering significant financial assistance to our pts, we suggest education to immigrants regarding insurance coverage, broader screening efforts and the ability to offer improved subspecialty care to RC pts. In particular, we look to target B and H who present at younger ages and are not Medicare eligible. We believe this will lead to earlier staging of RC, which should lead to improved survival for minority pts.

Occupation and demand for health services in Italy: Ways and means to reduce the opportunity costs imposed on patients

This paper explores whether and to which extent employment condition and working hours influence individuals’ decision process in consuming primary care. The hypothesis is that the higher the workers’ opportunity cost in terms of earning forgone, the less the demand for General Practitioner (GP) visits. Using survey data provided by the Italian National Institute of Statistics (ISTAT), we estimate a negative binomial regression model of GP visits as a function of employment related variables, controlling for a rich set of individual demographic characteristics, socio-economic variables, health status, supply and geographical factors. We show that self-employed workers, managers and cadres use significantly less primary care services notwithstanding the access is free. We conclude that they have higher opportunity costs than white and blue collars since they suffer more from the loss of earnings related to the absence from work. Self-employed individuals often face barriers to accessing healthcare services, such as lack of employer-sponsored health insurance and concerns about lost income during time off for medical appointments. As a result, they may delay seeking healthcare until their condition becomes more severe, leading to poorer health outcomes. Managers and cadres, on the other hand, may have greater access to healthcare services due to higher income levels and better job benefits. However, they may still face challenges such as long working hours and job-related stress, which can impact their ability to prioritize their health and seek timely medical care.From a policy perspective, our results suggest potential policy interventions aimed at addressing barriers to healthcare access for self-employed workers and promoting equitable healthcare utilization across different employment groups. Policy recommendations may include measures to enhance financial support (tax deductions for medical expenses, subsidies for health insurance premiums, or grants to cover the costs of healthcare-related absences from work), increase healthcare accessibility (enhancing the availability of mobile clinics, and extending operating hours for primary care facilities to accommodate the needs of working individuals) and raise awareness about preventive care among self-employed workers (workplace wellness programs, and incentives for regular health check-ups, screenings and healthy lifestyle choices, can encourage managers and self-employed workers to prioritize preventive measures). These policy implications are essential for ensuring equitable and universal access to healthcare services for all workers, regardless of their employment status.

Factors Affecting Cattle Insurance Purchase and its Effects on the Financial Situation of Dairy Farmers

The results of the study indicated that the age of the respondents, the type of animals reared, herd size, and membership in dairy cooperatives and districts significantly influenced the adoption of cattle insurance. The education of the respondent, herd size, the type of animal holding, and membership in dairy cooperatives significantly influenced the willingness to pay for cattle insurance. Willingness to pay was found to be less than the actual payment for the cattle insurance premium, and it was more in the case of crossbreds than other categories of animals. The type of animal and membership in dairy cooperatives had a positive and significant influence on the actual level of payment for cattle insurance. The landholding size, animal herd size, and non-farm occupation, along with dairying, had a positive influence, and the loss of animals had a negative impact on the net- income of the farmers. Finally, it can be concluded that cattle insurance is one of the best risk mitigation strategies to help farmers stabilize their income under risks and uncertain situations.

Trends in the Diagnostic Prevalence of Mental Disorders, 2012-2022.

Evaluations by the statutory health insurance carriers in Germany have revealed a rising prevalence of diagnoses of mental disorders, at varying levels and to varying extents. For mental health surveillance purposes, we analyzed prevalence trends across health insurance carriers, before and during the COVID-19 pandemic and stratified by diagnosis group, sex and age. Nationwide outpatient claims data of all statutorily insured individuals for the years 2012-2022 (Nmin = 68.7 million people, Nmax = 73.7 million people) were used to determine the diagnostic prevalence of mental disorders (ICD-10 F00-F99 and five selected diagnosis groups), with stratification by sex and age. Changes over time in the spectrum of all documented mental disorders are described. Over the period 2012-2022, the percentage of people with outpatient diagnoses of mental disorders rose from 33.4% to 37.9% (a relative increase of 13.4%). In the selected diagnosis groups, the trends ranged from -11.6% to +115.8% and were generally steady over time, though stronger or stagnating trends were seen in some groups from 2020 onward. Diagnostic prevalence rose to a greater extent in male (+18.3%) than in female individuals (+10.8%) over the period 2012-2022. The greatest increases (> +15%) were seen among 11- to 17-yearolds and in 60- to 84-year-olds. The composition of the diagnosis spectrum was more stable in adults than in children and adolescents. Trends in diagnostic prevalence differ across mental disorders and population subgroups and have changed in some diagnosis groups since the COVID-19 pandemic. Contextualizing research is needed for a better understanding of these developments.

Why does the cost of employer-sponsored coverage keep rising?

Over the past 25 years, the gap between the increase in health insurance costs and workers' wages has significantly expanded. This trend has led to significant concerns about healthcare affordability, with surveys revealing conflicting opinions regarding whether hospitals or health insurance companies bear the blame for escalating costs. To better understand these dynamics, we examined consumer price indices for health insurance, hospital services, and professional services from 2006 to 2023 using Bureau of Labor Statistics data. Our analysis shows that the hospital price index rose steadily between 2006 and 2023, faster than insurance premiums or professional services. To examine whether differences in underlying costs are driving higher hospital price increases, we evaluated the profit margins of hospitals and health insurance companies using the National Academy for State Health Policy''s Hospital Cost Tool and National Association of Insurance Commissioners Industry Reports. Our findings reveal that hospitals (for-profit and nonprofit) have consistently maintained higher profit margins than insurance companies. As health insurance costs continue to weigh heavily on working Americans, our analysis suggests that high hospital prices drive insurance premiums.

Monte Carlo Based Sampling Distribution of Annual Rate of Exceedance for Earthquake Insurance

ABSTRACT Seismic hazard expressed in terms of annual rate of exceedance and is used to calculate the earthquake insurance premium. Annual rate of exceedance is a complicated function of magnitudes, distances from site to earthquake sources and attenuation. Due to its complexity, determination of exact sampling distribution of earthquake insurance premium is not an easy task. This research proposes Monte Carlo simulation approach to determine the sampling distribution of earthquake insurance premium. Annual rate of exceedance was simulated first and then the insurance premium calculated based on simulation of annual rate of exceedance. The simulation involves quantifying synthetic catalogue similar to historical catalogue. Its simulation is conducted in order to construct annual rate of exceedance as an indicator of earthquake risk used in earthquake insurance. The simulation of 25 iteration and sample size of 100 shows that the sampling distribution of insurance premium is skewed to the right. The idea of using Monte Carlo simulation to study the sampling distribution of annual rate of exceedance is the originality of the study and the study contributes to the methodology of earthquake insurance.

Premium Estimation of General Insurance Contracts Using Buhlmann Credibility Model

Insurance coverage is reliant on appropriate premium determination, a focus addressed in this study through the application credibility theory. The aim was to compute short-term insurance premiums by leveraging authentic data from general insurance contracts as published in the IRA annual reports spanning from 2013 to 2021. The study employed the Buhlmann credibility model to derive net credible premiums for 13 non-life insurance contracts, assuming constant changes in business volumes. The estimation of credibility premiums was conducted by initially calculating within and between-portfolio variance with an aim of determining these premiums through linear estimation approach with the help of the credibility premium formula. The results revealed consistent credibility factors across all contracts, although other influencing factors were neglected. Therefore, it was highly recommended that an appropriate credibility model alongside other factors that influence premium estimation be considered to enhance the accuracy of premium estimates. Moreover, embracing heterogeneity over homogeneity is advised to better reflect individual risk profiles. The research underscores the importance of effective premium determination in insurance firms, as premiums constitute their primary revenue. Stakeholders, including insurers and regulators, are encouraged to integrate this approach and other relevant factors to enhance pricing accuracy and overall sector practices.

Financial Burden of Health Care in the Privately Insured US Population

This cross-sectional study examines how changes in privately insured families’ contributions to insurance premiums and out-of-pocket spending have affected the financial burden of health care in recent decades.

Directors' and officers' liability insurance: a systematic literature review

PurposeWe review and synthesize the existing research on directors' and officers’ (D&O) liability insurance. Our objectives are (1) to examine the institutional forces and regulatory requirements that have influenced the development of D&O liability insurance; (2) to identify the factors that influence firms to purchase D&O liability insurance and explore the consequences associated with its usage and (3) to identify gaps in the current literature and provide recommendations for future research on D&O liability insurance.Design/methodology/approachWe perform a systematic literature review (SLR) using the Preferred Reporting Items for a Systematic Review of Meta-Analysis (PRISMA) guidelines to examine archival studies that investigate the determinants and consequences of D&O liability insurance. Using a Boolean search strategy on the “Web of Science” (WoS) and PRISMA selection criteria, we review 64 published archival research articles and three working papers from 1987 to October 2023.FindingsOur review reveals that disclosing detailed information regarding D&O liability insurance, such as total insurance premiums and coverage limit, is predominantly voluntary, except in Taiwan. Our findings suggest that the decision to purchase D&O liability insurance is influenced by litigation risk, which is determined by factors such as firm size, complexity and corporate governance variables. We also find that D&O liability insurance has implications for financial reporting, audit outcomes, investment behavior and capital market performance.Practical implicationsIn the post-COVID era, where firms face pressure due to financial constraints, our research emphasizes the practical importance of carefully considering and understanding the impact of D&O liability insurance, particularly as it concerns the demand for such insurance.Originality/valueTo the best of our knowledge, this study represents the first systematic review of previous research on D&O liability insurance. Our review highlights some research gaps, particularly in relation to the implications for financial reporting practices, auditing outcomes, firm investment behavior and capital market consequences.

Determination of Pure Health Insurance Premiums Using Generalized Linear Models (GLM) with Poisson Distribution

Determination of Pure Health Insurance Premiums Using Generalized Linear Models (GLM) with Poisson Distribution

A STUDY ON THE IMPACT OF PAYROLL ON EMPLOYEE’S FINANCIAL WELLNESS IN CODEBOARD TECHNOLOGY PRIVATE LTD

This study explores how payroll deductions impact employee financial wellness at Code Board Technology. It assesses their influence on perceived income stability, financial stress, attitudes, and disposable income. The research adopts a multidimensional approach, evaluating savings behavior, debt management, budgeting skills, stress levels, and overall satisfaction. Various deduction types are examined, including taxes, insurance premiums, retirement contributions, and loan repayments. Data from 148 employees were analyzed using various statistical tests and tools. The findings shed light on challenges and perceptions related to deductions, suggesting implications for enhancing both employee financial wellness and organizational practices.

Optimal insurance with mean-deviation measures

This paper studies an optimal insurance contracting problem in which the preferences of the decision maker are given by the sum of the expected loss and a convex, increasing function of a deviation measure. As for the deviation measure, our focus is on convex signed Choquet integrals (such as the Gini coefficient and a convex distortion risk measure minus the expected value) and on the standard deviation. We find that if the expected value premium principle is used, then stop-loss indemnities are optimal, and we provide a precise characterization of the corresponding deductible. Moreover, if the premium principle is based on Value-at-Risk or Expected Shortfall, then a particular layer-type indemnity is optimal, in which there is coverage for small losses up to a limit, and additionally for losses beyond another deductible. The structure of these optimal indemnities remains unchanged if there is a limit on the insurance premium budget. If the unconstrained solution is not feasible, then the deductible is increased to make the budget constraint binding. We provide several examples of these results based on the Gini coefficient and the standard deviation.

Defined benefit pension plan inhibit the emergence of cooperation in the public goods games

As a social welfare, pension insurance has provided a great assistance to retiree in maintaining their livelihoods. In order to reward the contributions made by cooperators, an additional pension income is provided to them. In this paper, we study a public goods game based on the pension system on population structure, in which only cooperators can purchase pension insurance and receive pension benefits upon meeting specified conditions. In the simulation, we demonstrate the evolution of cooperation frequency over time and investigate the influence of insurance premium, pension baseline, the number of defected neighbors of cooperators, and the enhancement factor on the cooperation frequency. Additionally, we examine the impact of the pension system on cooperative behavior in triangular and hexagonal networks. Our results suggest that in the public goods game on networked structure, the pension system not only fails to promote cooperation but actually inhibits it, even when cooperators do not have to pay any costs and can receive pensions when conditions are met.