Assistant Professor, SGH Warsaw School of Economics
The chapter shows the possibility of analyzing the insurance market by using the Rothschild–Stiglitz equilibrium model and its subsequent modifications. As an example the Polish market of compulsory third party liability insurance was used.
Did you know that thanks to the self-selection induced by the possibility of driving behaviour monitoring, the insurance industry can minimise the negative effect information asymmetry has on the motor insurance market. This can be achieved, for example, by observing the choices made by the insured after being offered a new voluntary contract with a premium based on telematics data.