Measuring Consumer Sensitivity

( Janet_Duncan@notes.pw.com )
Fri, 20 Mar 98 11:08:56 EST

Is anyone familiar with any studies or papers that deal with measuring the
sensitivity of consumer demand (i.e., the market disruption) to increases in
deductible levels as compared to economically equivalent increases in
premiums? (Preferably the focus would be on homeowners coverage.) One
presumption is that, even though a premium increase of X versus a deductible
increase of Y might be equivalent from the insurer's financial perspective,
buyers might select the higher deductible (rather than the higher premium)
because they don't believe they are going to have a loss anyway. Any thoughts
on how to measure this or if it has been measured?

Please reply to: Janet_Duncan@notes.pw.com

Thank you.

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