Studies from University of Sunshine Coast Add New Findings in the Area of Insurance Economics

According to the authors of a study from Maroochydore, Australia, "Within the context of a competitive insurance market, this paper examines the impact of ambiguity on the behavior of buyers and sellers."

"Ambiguity is described through a probability measure on an extended state space that includes extra ambiguous states. It is shown that if insurers face the same or less ambiguity than their customers, a unique equilibrium exists where customers are fully insured," wrote S. Anwar and colleagues, University of Sunshine Coast.

The researchers concluded: "On the other hand, if insurers face more ambiguity than their customers, customers will be under insured and it is even possible that customers may not purchase any insurance."

Anwar and colleagues published their study in Insurance Mathematics & Economics (Competitive insurance market in the presence of ambiguity. Insurance Mathematics & Economics, 2012;50(1):79-84).

For more information, contact S. Anwar, Univ Sunshine Coast, Sch Business, Maroochydore, Qld 4558, Australia.

Publisher contact information for the journal Insurance Mathematics & Economics is: Elsevier Science Bv, PO Box 211, 1000 Ae Amsterdam, Netherlands.