Download This PaperCap & Trap and Alternatives in Price Discrimination
23 Pages Posted: 24 Nov 2020
Date Written: November 19, 2020
Abstract
Cap and Trap is a mechanism for smoothing rate change at policy renewal. However, this method still can expose an insurance company to a potential conduct risk. Individual clients could be overcharged or undercharged on an individual basis for their risk. This paper discusses alternative methods to better smooth prices with the aim of reducing the effect of price discrimination.
Keywords: Cap and Trap, Price Discrimination, Smooth Pricing
Suggested Citation: Suggested Citation
Hirsh, Imogen and Assa, Hirbod, Cap & Trap and Alternatives in Price Discrimination (November 19, 2020). Available at SSRN: https://ssrn.com/abstract=3733328 or http://dx.doi.org/10.2139/ssrn.3733328
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