자연재해보험시장에서 역선택의 존재와 원인에 대한 실증연구 = An Empirical Study on the Existence and Cause of Adverse Selection in Natural Disaster Insurance Markets

다국어 초록 (Multilingual Abstract)

The Korean government has introduced a natural disaster insurance products since 2001 to cope with increasing natural disasters such as typhoon, torrential rain, heavy storm, etc, which were caused by unpredictable climate changes and, until now, crop insurance, flood-storm insurance and aquaculture insurance are introduced. If adverse selection exists in the natural disaster insurance market, the farmers with higher risk only tend to buy this insurance which will end up harming sustainability of insurance business.
The purpose of this study is to analyze empirically whether and why adverse selection exists in the crop insurance market, the biggest one among natural disaster insurance markets and also to propose improvements against the adverse selection in the future.
To find out the existence of adverse selection in the insurance market, parametric and non-parametric methods were applied when testing the conditional independence between the insured amount maximization variable and the insurance incentive variable. The result reveals that hypothesis of conditional independence is rejected, which implies two variables are correlated. This finding indicates that and adverse selection exists and the insured with the intention of the higher insured amount actually receives the more insurance incentives.
Panel logit model, used to find the cause and learning effect of adverse selection in the insurance market, reveals that the farmers with a high unit-production have higher possibility of adverse selection but with no learning effect.
To maintain a long term growth in natural disaster insurance market, an insurer needs to make continuous efforts discouraging adverse selection by the means of minimizing information asymmetry, reviewing the insurance incentive and enforcing natural disaster forecast system.

참고문헌 (Reference)

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