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Full-Text Articles in Insurance

Only Too Human: Understanding Health Insurance Markets When Consumers Lack Information, Jonathan T. Kolstad Sep 2014

Only Too Human: Understanding Health Insurance Markets When Consumers Lack Information, Jonathan T. Kolstad

Wharton Public Policy Initiative

When the state and federal health insurance exchanges were introduced in 2013, much attention was paid to the logistics of their launch. Nearly a year later, policymakers should now be looking at a different question: how can we collect and use data from the exchanges to understand how consumers think about insurance choice, so as to make the exchanges function better?


Options Facing Congress In Renewing The Terrorism Risk Insurance Act, Howard Kunreuther, Erwann Michel-Kerjan Jul 2014

Options Facing Congress In Renewing The Terrorism Risk Insurance Act, Howard Kunreuther, Erwann Michel-Kerjan

Wharton Public Policy Initiative

The Terrorism Risk Insurance Act (TRIA) is set to expire at the end of 2014 and is currently under debate in Congress. Renewing TRIA may limit the amount of disaster relief the federal government would contribute after a terrorist attack, but the different options under which TRIA might be renewed carry implications for how losses from any attack would be spread between commercial policyholders, insurers, and taxpayers.


Scenario Analysis In The Measurement Of Operational Risk Capital: A Change Of Measure Approach, Kabir Kalyan Dutta, David F. Babbel Jun 2014

Scenario Analysis In The Measurement Of Operational Risk Capital: A Change Of Measure Approach, Kabir Kalyan Dutta, David F. Babbel

Business Economics and Public Policy Papers

At large financial institutions, operational risk is gaining the same importance as market and credit risk in the capital calculation. Although scenario analysis is an important tool for financial risk measurement, its use in the measurement of operational risk capital has been arbitrary and often inaccurate. We propose a method that combines scenario analysis with historical loss data. Using the Change of Measure approach, we evaluate the impact of each scenario on the total estimate of operational risk capital. The method can be used in stress-testing, what-if assessment for scenario analysis, and Loss Given Default estimates used in credit evaluations.


The Effect Of Entry Regulation In The Health Care Sector: The Case Of Home Health, Daniel Polsky, Guy David, Jianing Yang, Bruce Kinosian, Rachel M. Werner Feb 2014

The Effect Of Entry Regulation In The Health Care Sector: The Case Of Home Health, Daniel Polsky, Guy David, Jianing Yang, Bruce Kinosian, Rachel M. Werner

Health Care Management Papers

The consequences of government regulation in the post-acute care sector are not well understood. We examine the effect of entry regulation on quality of care in home health care by analyzing the universe of hospital discharges during 2006 for publicly insured beneficiaries (about 4.5 million) and subsequent home health admissions to determine whether there is a significant difference in home health utilization, hospital readmission rates, and health care expenditures in states with and without Certificate of Need laws (CON) regulating entry. We identify these effects by looking across regulated and nonregulated states within Hospital Referral Regions, which characterize well-defined ...


Financial Valuation Of Pbgc Insurance With Market-Implied Default Probabilities, Jules H. Van Binsbergen, Robert Novy-Marx, Joshua Rauh Jan 2014

Financial Valuation Of Pbgc Insurance With Market-Implied Default Probabilities, Jules H. Van Binsbergen, Robert Novy-Marx, Joshua Rauh

Finance Papers

In this paper, we use financial valuation techniques to measure the unfunded liabilities associated with the Pension Benefit Guaranty Corporation (PBGC) single-employer pension insurance program. This is an alternative approach to the calculations of expected future PBGC payouts in the PBGC exposure reports. The PBGC insurance is akin to an exchange option, a financial instrument that allows a party to exchange one risky asset for another. Calculating the value of this option for each PBGC-covered plan provides a measure of the fair market price of the PBGC guarantee that is consistent with the finance principles of risk-neutral pricing. That is ...