Loss coverage, defined as expected population losses compensated by insurance, is a public policy criterion for comparing different risk-classification regimes. Using a model with two risk-groups (high and low) and iso-elastic demand, we compare loss coverage under three alternative regulatory regimes: (i) full risk-classification (ii) pooling (iii) a price collar, whereby each insurer is permitted to set any premiums, subject to a maximum ratio of its highest and lowest prices for different risks. Outcomes depend on the comparative demand elasticities of low and high risks. If low-risk elasticity is sufficiently low compared with high-risk elasticity, pooling is optimal; and if it is sufficiently high, full risk-classification is optimal. For an intermediate region where the elasticities are not too far apart, a price collar is optimal, but only if both elasticities are greater than one. We give extensions of these results for more than two risk-groups. We also outline how they can be applied to other demand functions using the construct of arc elasticity.

中文翻译：

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价格区间可以增加保险损失赔偿吗？

损失覆盖率定义为通过保险补偿的预期人口损失，是比较不同风险分类制度的公共政策标准。使用具有两个风险组（高风险组和低风险组）和等弹性需求的模型，我们比较了三种替代监管制度下的损失承保范围：（i）全面风险分类（ii）池化（iii）价格区间，其中每个保险公司允许设定任何保费，但须遵守针对不同风险的最高价格和最低价格的最大比例。结果取决于低风险和高风险的相对需求弹性。如果低风险弹性与高风险弹性相比足够低，则集中是最佳的；如果它足够高，则完整的风险分类是最佳的。对于弹性相差不太远的中间区域，价格区间是最佳的，但前提是两个弹性都大于 1。我们将这些结果扩展到两个以上的风险组。我们还概述了如何使用弧弹性的构造将它们应用于其他需求函数。