Cost-benefit Analysis of Insurance Companies in Usage-based and Common Car Insurance Market

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Dabbagh, Esmaeil | 2017

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Type of Document: M.Sc. Thesis
Language: Farsi
Document No: 49397 (09)
University: Sharif University of Technology
Department: Civil Engineering
Advisor(s): Samimi, Amir
Abstract:
Car usage-based insurance is recently introduced to the market of car insurance and because these contracts are new in this market, Insurers and other beneficiaries are eager to know about the outcome of them. In this study, the outcome of these contracts and equilibrium of the market have been analyzed from the view of insurers. An insurer as a profitable firm want to analyze its costs and benefits, and as a result, one of the most important factors from the view of the insurer is the cost-benefit analysis when the insurer enters into the new market of usage-based insurance. For this analysis, by contract selection and insurer loss payment data, insurer cost and benefit forecasting models estimated from discrete choice and regression models. After that, a game was defined between beneficiaries of the market such as Central Insurance of Iran, insurers, and customers. And, the equilibrium of the game analyzed in different case and insurers. In all cases, equilibrium strategy was to enter the new market for the insurers. Optimum contract type and pricing depended on the market share of insurer and order of entering the new market by insurers
Keywords:
Game Theory ; Cost-Benefit Analysis ; Discrete Choice Model ; Automobile Insurance ; Usage-Based Insurance

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