Black boxes and market efciency: the efect on premiums in the Italian motor‑vehicle insurance market

• Autores: Donatella Porrini, Giulio Fusco, Cosimo Magazzino
• Localización: European journal of law and economics, ISSN 0929-1261, Vol. 49, Nº 3, 2020, págs. 455-472
• Idioma: inglés
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• Resumen

  • The paper addresses the research question of whether black boxes afect the market efciency, particularly by reducing the level of premiums. The case analyzed is the Italian motor-vehicle insurance market, characterized by the greatest amount of black boxes in the world as a consequence of regulatory interventions that fostered the spread of these kinds of devices. Particularly, using the data provided by the Italian Insurance Authority (IVASS), we show a specifc relation between the increasing number of these devices and the decreasing trend in average premium. Conclusive remarks outline that in the near future this efciency efect may increase because of the specifc use of information derived from the black box that reveals the behaviors of the drivers and allows for innovative ways of individually profling the insurance policies.