Experimental Evidence on the Impact of Telematics Devices on Welfare
Journal
I.VW Management Information
Type
newspaper article
Date Issued
2020
Author(s)
Abstract (De)
In a behavioral experiment with around
500 participants, we measured the willingness
of insurance policyholders to pay for
a telematics contract. We find that there
are significant welfare costs associated with
digital monitoring for which individuals
need to be compensated. Our results suggest
that digital monitoring causes a reduction
in the willingness to pay (WTP) which is
in the range of 25 to 50 percent of the
expected loss. Our findings set a benchmark
for the demand-side costs of telematics contracts
that need to be contrasted with the
benefits of using this technology.
500 participants, we measured the willingness
of insurance policyholders to pay for
a telematics contract. We find that there
are significant welfare costs associated with
digital monitoring for which individuals
need to be compensated. Our results suggest
that digital monitoring causes a reduction
in the willingness to pay (WTP) which is
in the range of 25 to 50 percent of the
expected loss. Our findings set a benchmark
for the demand-side costs of telematics contracts
that need to be contrasted with the
benefits of using this technology.
Language
English
HSG Classification
contribution to practical use / society
Publisher
Institut für Versicherungswirtschaft, I.VW‐HSG
Publisher place
St. Gallen
Start page
18
End page
20
Pages
3
Subject(s)
Division(s)
Eprints ID
266702