Claims Adjudication in the Personal Automobile Insurance Residual Market

Browne, Mark J.; Wells, Brenda

doi:10.2307/253613

Cited by 6 publications

(4 citation statements)

References 5 publications

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“…Following Browne and Wells (1999), we present a model of insurer decision making behavior and then describe the data used for testing. Following Yinger (1998), we employ regression analysis to investigate potential bias in claims adjustment practices.…”

Section: Methodsmentioning

confidence: 99%

“…Browne and Wells (1999) develop a model of insurer claims practices in personal automobile insurance residual markets. Their specific objective is to consider insurer incentives to be generous in claims payment across different types of residual market mechanisms.…”

Section: Modelmentioning

confidence: 99%

“…Despite the importance of claims handling practices to consumers and insurers, relatively little research has been done in this area. A few studies focus on the insurer's role in claims settlement, such as how organizational characteristics affect claims service quality, or the effect of claims payment practices on insurer total costs (see Doerpinghaus, 1991; Barrese et al., 1995; Browne and Wells, 1999). Others have analyzed the effect of the legal system on the claims process, including the plaintiff's willingness to litigate or settle, and circumstances under which an attorney is more likely to be involved in the negotiations (see Cummins and Tennyson, 1996; Kritzer, 1998; Kritzer and Krishnan, 1999).…”

Section: Introductionmentioning

confidence: 99%

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Personal Bias in Automobile Claims Settlement

Doerpinghaus¹,

Schmit²,

Yeh³

2003

J of Risk & Insurance

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Despite the importance of claims handling practices to consumers and insurers, relatively little research has been done in this area. Our purpose here is to consider one aspect of automobile bodily injury liability claims management: the assignment of fault across parties as judged by the insured defendant's claims adjuster. Because legal fault assessment directly affects whether a defendant is held liable, and if so, for how much, this aspect of claims management is significant. We use accident data from the 1997 Insurance Research Council Closed Claim Survey to test for relationships between fault assessment and gender, age, and state comparative negligence rules. Controlling for actual fault, we find a greater assessment of fault against female, young, and elderly drivers. The results of the study are of interest to insurers seeking to provide better customer service, to consumer advocacy groups interested in claims settlement practices, and to insurance regulators. Copyright 2003 The Journal of Risk and Insurance.

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Section: Methodsmentioning

confidence: 99%

Section: Modelmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Personal Bias in Automobile Claims Settlement

Doerpinghaus¹,

Schmit²,

Yeh³

2003

J of Risk & Insurance

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“…Recall that the insurer's choice of the generosity factor is determined by minimization of two conflicting functions, the loss costs, ( ) * (1 ) P g g y g x = ⋅ + − , and the administrative costs, (see Browne and Wells (1999)). Note that…”

Section: Modelmentioning

confidence: 99%

Risk Aversion, Negotiation, and Claims Settlement Strategies

2005

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We examine the optimal claims settlement strategy for a liability insurer negotiating with classes of claimants who differ in risk attitude and negotiating skill. Our model demonstrates that a profit-maximizing insurer will be systematically less generous in claims payment to claimants who are more risk averse and who experience greater negotiating costs. We test our theory empirically using the 1997 Insurance Research Council automobile claims data. Following the existing literature we use claimant gender and age to identify classes of claimants with different risk preferences and negotiation costs. Empirical analysis is consistent with systematically less generous payment to claimants in those classes.3 Risk Aversion, Negotiation, and Claims Settlement Strategies

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Insurance Ethics, an Oxymoron?

Barrese¹

Research in Ethical Issues in Organizations

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Claims Adjudication in the Personal Automobile Insurance Residual Market

Cited by 6 publications

References 5 publications

Personal Bias in Automobile Claims Settlement

Personal Bias in Automobile Claims Settlement

Risk Aversion, Negotiation, and Claims Settlement Strategies

Insurance Ethics, an Oxymoron?

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