Prof. Dr. Jörg Schiller
Function and compensation of brokers in industry insurance
A distinct feature of intermediation in business insurance is that brokers perform importantant services both for insurance companies and policyholders. Policyholders are mainly interested in having appropriate insurance coverage (product choice) and low prices. Brokers are able to observe important risk-related factors during their counseling activities, which can be used by insurers for rate-making (risk classification). Insurance brokers are typically remunerated throught premium-related commissions by insurance companies. In some cases performance-related commission payments are paid on top. A fee-for-service remuneration by policyholders is currently possible but not standard.
The main reseach focus of the project is to examine the impact of remuneration on miscounselling incentives for brokers. Furthermore, it will be evaluated to what extent new regulatory actions have the potential to improve the quality of consulting and the effiiciency of intermediation by brokers in the field of industry insurance.
| Project participants: | Jörg Schiller, Uwe Focht (Swiss Re, Beijing), Andreas Richter (LMU, Munich) |
| Publications: | Focht, Uwe, Andreas Richter and Jörg Schiller, 2013, Intermediation and (Mis-)Matching in Insurance Markets - Who should pay the insurance broker?, Journal of Risk and Insurance 80: 329.350. Schiller, Jörg, 2011, Ökonomische Aspekte der Entlohnung und Regulierung unabhäniger Versicherungsvermittler, Zeitschrift für die gesamte Versicherungswissenschaft 100: 113-130. Richter, Andreas und Jörg Schiller, 2009, Entlohnung und Regulierung unabhängiger Versicherungsvermittler, in: Schäfer, Klaus, Hans-Peter Burghof, Lutz Johanning, Hannes F. Wagner und Sabine Rodt (Herausgeber), Risikomanagement und kapitalmarktorientierte Finanzierung: Festschrift zum 65. Geburtstag von Bernd Rudolph, Verlag Fritz Knapp. |
| Project funding: | Deutsche Forschungsgemeinschaft |
Reasons for fraudulent behavior by policyholders
In most insurance markets, fraudulent behavior of policyholders and claimants lead to serious problems. According to standard economic theory which assumes completely selfish preferences, fraudulent behavior should exclusively be triggered by profit maximization. Consumer surveys indicate that non-monetary aspects, like the social environment of policyholders, i.e. the behavior as well as the general attitude of peers, may influence fraudulent activities.
The main scope of the reseach project is to analyse influencing factors of fraudulent behavior in insurance contexts in the lab. A matter of particular interest is the importance of insurance specific factors, like deductibles and risk exclusions, and non-insurance specific factors like social norms and social interaction. Furthermore, it will examined to what extent standard incentive instruments are actually applicable to mitigate fraudulent behavior in an experimental context.
| Project participants: | Jörg Schiller, Frauke von Bieberstein (U of Bern, Vallendar), Kerstin Puchstein (U of Hohenheim) |
| Publications: | Lammers, Frauke and Jörg Schiller, 2010, Einflussfaktoren für betrügerisches Verhalten von Versicherungsnehmern: erste experimentelle Befunde, Zeitschrift für die gesamte Versicherungswissenschaft 99: 649-663. |
| Working paper: | von Bieberstein, Frauke and Jörg Schiller, Contract design and insurance fraud: an experimental investigation, August 2015. Puchstein, Kerstin, Jörg Schiller and Frauke von Bieberstein, Can we trust consumers` survey answers when dealing with insurance fraud? - Evidence from an experiment, August 2015. |
| Project funding: | Deutscher Verein für Versicherungswissenschaft |