The Asymmetric Information Problem in Taiwan's Cancer Insurance Market

This paper investigates the problem of asymmetric information in Taiwan's cancer insurance market. Through the survey data, we find evidence of adverse selection existing in this market. Furthermore, we collect additional information on the individual, and find that the individual's family...

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Bibliographic Details
Published inThe Geneva risk and insurance review Vol. 36; no. 2; pp. 202 - 219
Main Authors Wang, Kili C., Peng, Jin-Lung, Sun, Yi-Yun, Chang, Yao-Chia
Format Journal Article
LanguageEnglish
Published London Palgrave Macmillan 01.12.2011
Palgrave Macmillan UK
SeriesThe Geneva Risk and Insurance Review
Subjects
Adverse selection
Automobile insurance
Cancer
Customer information files
Economics and Finance
Finance
Financial Services
Health insurance
Health status
Homeowners insurance
Information asymmetry
Insurance
Insurance companies
Insurance coverage
Insurance industry
Insurance markets
International
Knowledge management
Life insurance
Marital status
Moral hazard
National health insurance
Personal health
Personal information
Policyholders
Purchasing
Questionnaires
Risk Management
Studies
Underwriting
Variables
Taiwan
cancer insurance
asymmetric information
adverse selection
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Summary:This paper investigates the problem of asymmetric information in Taiwan's cancer insurance market. Through the survey data, we find evidence of adverse selection existing in this market. Furthermore, we collect additional information on the individual, and find that the individual's family cancer history contains additional valuable information. It can not only more accurately predict the probability of contracting cancer, as well as predict the willingness to purchase extended cancer insurance, but it can also help to mitigate the severity of adverse selection in the insurance market.
ISSN:1554-964X
1554-9658
DOI:10.1057/grir.2010.12