Abstract : The European insurance industry benefits from some special antitrust exemptions. Indeed, insurers can syndicate, via a "pool", for the coverage of undiversifiable risks. We show that the pool issue amounts to share a common value divisible good between capacity constrained agents with a reserve price and private information. We characterize the equilibrium risk premium of this game and the resulting insurance capacity offered. We then compare the pool to a discriminatory auction upon two dimensions, the total capacity insured and the premiums. There is no clear domination of one auction format. Strength of affiliation and competition are key variables.
https://hal-univ-pau.archives-ouvertes.fr/hal-02439718 Contributor : Anne PERRIN BONRAISINConnect in order to contact the contributor Submitted on : Tuesday, January 14, 2020 - 5:11:56 PM Last modification on : Monday, February 14, 2022 - 12:40:02 PM Long-term archiving on: : Wednesday, April 15, 2020 - 7:04:53 PM
David Alary, Catherine Bobtcheff, Carole Haritchabalet. Insurance Pools for New Undiversifiable Risk. 66th Annual of French Economic Association - AFSE, Jun 2017, Nice, France. ⟨hal-02439718⟩