Automobile Insurance: Analysis of the Impact of a Premium Change on the Behavior of Insured at the Time of Subscription and Termination

Abstract: the subscription of an insurance contract allows an individual to take precautions against the repercussions of hazards and fortuitous events affecting their person or property. In return for this insurance policy, the insured pays a contribution at the beginning of the coverage period, while the insurer may have to provide a service if a certain type of damage occurs during the period in question. While the insurance market acts both on the insured by being able to induce him to terminate his insurance contract, in the case of excessive prices to those of other insurers, and on the insurer by forcing him to a certain extent to make his insurance premiums tolerable. It therefore appears that the insurance premium risk threatens the competitiveness of insurers on the insurance market and the termination of policyholders at the end of the contract term.

By choosing to work on automobile insurance market, which is becoming increasingly competitive, as precise premium pricing is a major challenge for each insurer. The aim of this work is to study the sensitivity of insured persons to positives changes in automobile insurance premiums at the end of the contract.

Key words: automobile insurance; customer behavior; generalized linear model; logistic regression probability of termination; sensitivity to insurance premium variations

        JEL: M310