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The Price Effects of Online Car Insurance Using Expense Rates
Journal of Insurance and Finance
2013, 24(1),
pp.89-111
Publisher : Korea Insurance Research Institute
Research Area : Business Management
Publisher : Korea Insurance Research Institute
Research Area : Business Management
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This paper analyzes the effects of price by online car insurance using expense rates of 14 non-life car insurance companies during the period 1999-2012. We find that overall, the expense rates of online business are lower by 9.27 percent than those of offline one in the whole sample. In addition, the log expense rates of car insurance companies have a significant negative relationship with newly running online channels along with the existing offline one, implying that the operation of online business may reduce the expense rates. Moreover, the expense rates of the car insurance companies only with online channels are lower by 38~40 percent than those with offline channels only. In addition, their expense rates are lower by 32 percent or so than those with both offline and online channels. Finally, the dispersion of expense rates of the former is larger than that of the latter, and their dispersion of expense rates when running both online and offline is larger than when offline only.
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