Trust is a key determinants of any financial transaction. Exchanges in insurance markets are a particular type of financial transaction where a current payment – the premium – is exchanges for a promise of a future, contingent payment – the indemnity due when the casualty occurs. We argue that trust is key in fostering these type of exchanges. Trust enters two ways: because it affects the willi...

The dramatic rise in the disability insurance (DI) roles in the last 20 years has been the subject of much controversy in both popular and academic circles. While, the relationship between DI and labor force participation has been the subject of a growing literature, the mechanism of this transition from employment to DI remains unclear. We hypothesize that one mechanism is the state-level admi...

Research shows consolidation in the private health insurance industry leads to premium increases, even though insurers with larger local market shares generally obtain lower prices from health care providers. Additional research is needed to understand how to protect against harms and unlock benefits from scale. Data on enrollment, premiums, and costs of commercial health insurance--by insurer,...

Using a local randomized experiment that arises from a sharp discontinuity in Disability Insurance (DI) policy in Norway, we provide transparent and credible identification of how financial incentives induce DI recipients to return to work. We find that many DI recipients have considerable capacity to work that can be effectively induced by providing financial work incentives. We further show t...

We assess the degree of consumption smoothing implicit in a calibrated life-cycle version of the standard incomplete-markets model, and we compare it to the empirical estimates of Blundell et al. (2008) (BPP thereafter). We find that households in the model have access to less consumption smoothing against permanent earnings shocks than what is measured in the data. BPP estimate that 36% of per...

This paper studies the provision of deposit insurance along with liquidation decisions without commitment in an economy with heterogenous households. The analysis separates control of the balance sheet of a failed bank from the provision of deposit insurance. We study the factors that determine orderly liquidation and the effects of this policy on the prospect of bank runs. We also study the pr...

The global insurance industry provides investment and supportive insurance services such as: motor/vehicle, fire, home, personal accident, product liability, public liability and professional indemnity. These services are very beneficial to private individuals and companies and critically depend on the actual factors and risks involved in the insurance policy. There are risks involved in taking...