Switching costs in competitive health insurance markets : the role of insurer's pricing strategies - Archive ouverte HAL Access content directly
Preprints, Working Papers, ... Year :

Switching costs in competitive health insurance markets : the role of insurer's pricing strategies

(1) ,
1
Pierre Stadelmann
  • Function : Author

Abstract

Our article deals with pricing strategies in Swiss health insurance markets and focuses on the relationship between basic and supplementary insurance. We analyzed how firms’ pricing strategies (i.e., pricing of basic and supplementary products) can create switching costs in basic health insurance markets, thereby preventing competition in basic insurance from working properly. More specifically, using unique market and survey data, we investigated whether firms use bundling strategies or supplementary products as low-price products to attract and retain basic insurance consumers. To our knowledge, this is the first paper to analyze these pricing strategies in the context of insurance/health insurance. We found no evidence of bundling in the Swiss setting. We did however observe that firms used low-price supplementary products that contributed to lock in consumers. A majority of firms offered at least one of such product at a low price. None offered low-price products in both basic and supplementary markets. Low-price insurance products differed across firms. When buying a lowprice supplementary product, consumers always bought their basic contract from the same firm. Furthermore, those who opted for low-price supplementary products were less likely to declare an intention to switch basic insurance firms in the near future. This result was true for all risk category levels.
Fichier principal
Vignette du fichier
WP 2004.pdf (964.09 Ko) Télécharger le fichier
Origin : Files produced by the author(s)
Loading...

Dates and versions

hal-02635107 , version 1 (27-05-2020)

Identifiers

  • HAL Id : hal-02635107 , version 1

Cite

Karine Lamiraud, Pierre Stadelmann. Switching costs in competitive health insurance markets : the role of insurer's pricing strategies. 2020. ⟨hal-02635107⟩

Collections

ESSEC ESSEC-WP
206 View
302 Download

Share

Gmail Facebook Twitter LinkedIn More