Speaker：Yan Zeng (Sun Yat-sen University)

Time：2023-7-20, 14:00

Location：Conference Room 105 at Experiment Building at Haiyun Campus

Abstract:

This paper develops a theoretical framework with heterogeneous customers and two representative insurers to study the impact of insurers’ technology accessibility on their technology adoption decisions and market shares. Intuitively, when technology accessibility is observable, an insurer’s access to a new technology improves its market share. However, when technology accessibility is unobservable, the insurer’s access to the new technology has some additional side effects on its market share. First, the insurer applies its available technology even when the technology increases its cost and premium, which decreases its market share. Moreover, the unobservable technology accessibility leads customers to expect that insurers may all have access to the new technology and underestimate the premium of those without access, which also decreases the market share of an insurer who has access to the new technology. Our results help explain the unclear relationship between technology adoption and the market share dynamic of insurance companies in practice.