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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 : Social Science > Business Management

Daigyo Seo 1 황진태 2

1건국대학교
2보험연구원

Accredited

ABSTRACT

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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