The costs of annuitising: are retirees fairly charged?
| Autor: | Cecilia Dassatti, Rodrigo Lluberas |
|---|---|
| Rok vydání: | 2019 |
| Předmět: |
Economics and Econometrics
Market rate Cost efficiency business.industry 030503 health policy & services media_common.quotation_subject 05 social sciences General Business Management and Accounting Interest rate 03 medical and health sciences Basis point Accounting 0502 economics and business Econometrics Balance sheet 050207 economics 0305 other medical science business Inefficiency Finance Risk management Average cost media_common |
| Zdroj: | The Geneva Papers on Risk and Insurance - Issues and Practice. 45:535-557 |
| ISSN: | 1468-0440 1018-5895 |
| Popis: | This study analyses the costs associated with annuitisation and provides estimates of what we call the “efficient annuity margin”, which is the margin over the market rate that an efficient insurance company could charge in order to cover its costs. Using data from the financial statements filed by insurance companies to the regulator, we estimate a translog cost function following the stochastic frontier methodology. Our data set consists of quarterly balance sheet information from all of the Uruguayan insurance companies over the period 2005–2015. We find that the average cost inefficiency is 17.8% and that there is substantial heterogeneity across firms. In addition, our results show that the annuity margin which an efficient insurance company could charge in order to cover its administrative costs is 11 basis points over the market long-term interest rate. Our proposed method may allow the identification of the administrative and selection costs of providing annuities. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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