Cost‐effectiveness, fairness and adverse selection in mutual aid
研究了在线互助模式在无保险公司参与下的成本效益、精算公平条件，并通过实证分析证实了缺乏精算公平会导致逆向选择问题。
Abstract Online mutual aid (MA) is a novel form of ex‐post risk sharing empowered by InsurTech to provide critical illness coverage without involving an insurer. In this paper, we first provide a rigorous examination of the underpinning theory and analyze MA model's cost‐effectiveness. In addition, we theoretically investigate the condition for MA's actuarial fairness among all participants. Our numerical illustration also shows that current MA plans lack the consideration of actuarial fairness as they differentiate members only by gender and age group of large bandwidths. Last, our empirical analysis confirms the existence of adverse selection due to the lack of actuarial fairness.