Overview
Most academic and policy commentary represents adverse selection as a severe problem in insurance, which should always be deprecated, avoided or minimised. This book gives a contrary view. It details the exaggeration of adverse selection in insurers' rhetoric and insurance economics, and presents evidence that in many insurance markets, adverse selection is weaker than most commentators suggest. A novel arithmetical argument shows that from a public policy perspective, 'weak' adverse selection can be a good thing. This is because a degree of adverse selection is needed to maximise 'loss coverage', the expected fraction of the population's losses which is compensated by insurance. This book will be valuable for those interested in public policy arguments about insurance and discrimination: academics (in economics, law and social policy), policymakers, actuaries, underwriters, disability activists, geneticists and other medical professionals.
Full Product Details
Author: Guy Thomas (University of Kent, Canterbury)
Publisher: Cambridge University Press
Imprint: Cambridge University Press
Dimensions:
Width: 15.20cm
, Height: 1.50cm
, Length: 22.80cm
Weight: 0.410kg
ISBN: 9781107495906
ISBN 10: 1107495903
Pages: 282
Publication Date: 02 May 2017
Audience:
Professional and scholarly
,
Professional & Vocational
Format: Paperback
Publisher's Status: Active
Availability: Available To Order
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Reviews
Advance praise: 'R. Guy Thomas challenges the orthodox views held by the insurance industry, actuaries, and economists concerning the problem of adverse selection. He makes his case that a little adverse selection is actually a good thing in a sensible, pragmatic, and compelling manner. His critical insights about the debates on restricting risk classification in insurance should be essential reading for policy makers.' Michael Hoy, University of Guelph, Canada Advance praise: 'Despite dramatic warnings, insurance companies continue to prosper despite bans on gender rating, genetic testing, racial and other discriminations in setting policy terms. This thought-provoking book explains why. The author makes a convincing case for even tighter regulation of allowable risk classifications to enhance the welfare of society of a whole - especially timely now as 1-in-5 proposers for life insurance are not accepted at standard rates.' Shane Whelan, FFA, FSAI, Former Managing Editor of the British Actuarial Journal Advance praise: 'Actuaries traditionally see nothing but danger in adverse selection. R. Guy Thomas, an actuary himself, sees opportunity. Using the concept of loss coverage, Thomas challenges the conventional wisdom of how economists model insurance markets, much of which, he sets out to show, is more myth than reality. Lucidly written and sure to get the reader thinking afresh.' Angus Macdonald, Heriot Watt University, Scotland
Author Information
Guy Thomas is an actuary and investor, and an honorary lecturer at the University of Kent, Canterbury. His academic publications have received prizes from the Institute and Faculty of Actuaries and the International Actuarial Association. He is also the author of Free Capital: How Twelve Private Investors Made Millions in the Stock Market.
