Summary |
The purpose of this book is to build an economic model of the relationships between insurers’ pricing systems and loss prevention from which these issues can be examined. The model is constructed in three stages. In chapter 2 the behavioural responses of insureds to the financial incentives of insurance contracts is examined. In chapter 3 these pricing strategies are the themselves examined in the light of insurers’ objectives and the state of competition in the market for insurance services. Chapter 4 examines whether the rating structures adopted by insurers and the institutions within the insurance market can disseminate appropriate information on loss probabilities.
Chapter 5 analyses the fire insurance market, the rating systems which have emerged and their implications for fire prevention. A comparative study of motor insurance practice is undertaken in chapter 6. Chapter 7 considers the overall context within which decisions on loss prevention are made and places the insurance effects within a wider list of costs and benefits of loss prevention. The implications for social policy, together with the policy issues facing both insurers and insureds are then discussed in the final chapter.
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