Senior Lecturer in Actuarial Science, Dr Pradip Tapadar, Honorary Lecturer in Actuarial Science, Guy Thomas, and PhD Student, Indradeb Chatterjee, from the School of Mathematics, Statistics and Actuarial Science (SMSAS) at the University of Kent, gave a talk at the Eighth International Conference on Mathematical and Statistical Methods for Actuarial Sciences and Finance (MAF) in April 2018.
The Conference, held at the University Carlos III in Madrid, Spain, saw Pradip, Guy and Indradeb delivering a talk on their research paper titled, ‘When is utilitarian welfare higher under insurance risk pooling?’, alongside Professor Angus Macdonald from Heriot-Watt University.
Abstract:
This paper focuses on the effects of bans on insurance risk classification on utilitarian social welfare. We consider two regimes: full risk classification, where insurers charge the actuarially fair premium for each risk, and pooling, where risk classification is banned and for institutional or regulatory reasons, insurers do not attempt to separate risk classes, but charge a common premium for all risks. For the case of iso-elastic insurance demand, we derive sufficient conditions on higher and lower risks’ demand elasticities which ensure that utilitarian social welfare is higher under pooling than under full risk classification. Empirical evidence suggests that these conditions may be realistic for some insurance markets.
Click here for more information about the conference.
Dr Pradip Tapadar
Senior Lecturer in Actuarial Science
Pradip is a Senior Lecturer in Actuarial Science and is Head of Research for the Centre of Actuarial Science, Risk and Investment (CASRI) at Kent. He is a Fellow of the Faculty of Actuaries in Scotland and the Institute of Actuaries in India. His research interests include economic capital and financial risk management, and public policy aspects of risk classification.
Guy Thomas
Honorary Lecturer in Actuarial Science
Guy is an Honorary Lecturer in Actuarial Science and was a full-time lecturer in the School in the 1990s. He has experience as an Actuary and an Investor, and has published two books; ‘Loss Coverage: Why Insurance Works Better With Some Adverse Selection’ (2017. Cambridge: Cambridge University Press) and ‘Free Capital’ (2011. Petersfield: Harriman House). Together with Pradip, Guy runs a blog titled, ‘Loss Coverage – why insurance works better with some adverse selection’.
Indradeb Chatterjee
PhD Student in Actuarial Science
Indradeb is a PhD Student in Actuarial Science. He began his PhD programme in 2017 and is supervised by Pradip. His research interests include insurance loss coverage and social welfare.