The contribution of the New Institutional Economics for the analysis of strategies and its theoretical and practical implications for the motor insurance in Germany in the light of socio-demographic and technical changes by the example of carsharing.

This work examines the impact of the selected theories of the New Institutional Economics in the form of the principal agent, transaction cost and property rights theories onto the current pressing question for motor insurers of how to align themselves strategically in a rapidly changing more and more digital market, with values and structures of its participants changing at an equally fast rate. The phenomena of carsharing has taken up a dynamic growth in the last years, thus adding to the since the deregulation of the German insurance market in July 1994 predatory price wars a new challenge, raising the question of whether or not to be strategically involved in the business field of carsharing. The essence is that these results can be transferred as a blueprint onto mobility in general, giving the motor insurer the possibility to transform into a mobility insurer. This research combines the new trend for mobility in the form of carsharing with digitals aspects, as well as new values in society and the trend for a sharing economy, which is especially relevant for car owners, as the average still time of a private car is 23 hours and in an increasingly urbanized environment parking space is scarce and expensive. The main conclusions of this study can be summarized as: (1) Signalling and screening have a great impact, especially in the contractual ex ante phase, on the reliability of risk information and the risk assessment of the portfolio for a pricing approach for the motor insurers. Negligence in the focus of a risk calibrated selection of customers can result for the motor insurer in the agency problem of adverse selection. Therefore motor insurers have to pay very much attention to their selection mechanisms of new customers. Moreover it proved to be advisable to work with trust, but as a second result (2), research showed that trust is to be used cautiously though, ex ante and ex post. That applies especially for the contractual ex ante phase, as once a customer is in the carsharing portfolio of the motor insurer it is very hard to prune him. This is especially the case for the concept of carsharing, as the carsharing company acts as an intermediary between end customer and motor insurer and they have partially incongruent targets in regard to growth and thus the resulting profitability, as the motor insurer needs to pay for the damages. Trust proved to be exceedingly efficient in the possibilities to lower transaction costs, as trust was found to act as a “glue” to close the openings of imperfect controlling systems and thus save on costly signalling or monitoring systems. This finding is new, as trust was always regarded to be contradictory to an environment of assumed bounded rationality, asymmetric information and opportunistic behaviour. Trust builds up social capital and creates an intrinsic motivation within the carsharing customer to live up to this reputation. A third result (3) is the finding that simplicity is of high importance for the success of the collaboration between carsharing customers, carsharing companies and the motor insurer. The demand for simplicity must be brought inline by the motor insurers with an adequate balance of risk acceptance. The solution lies in the implementation of moderate simplicity for the contractual situation, as well as for the customer selection process. Contracts should be as short as possible and as long as necessary, limiting the questions in the questionnaires to the most important points for an acceptable risk assessment. The thus generated knowledge leakage can be compensated by signalling, screening and trust. (4) Incentive systems on an individual level are effective, contribute to a goal harmonization with the motor insurer, do not have to be tied to carsharing (e.g. vouchers, etc.) and are better suited to counteract opportunistic behaviour than punishment systems. Furthermore, a status level (class) system which gives the carsharing customer a certain privilege is also recommended to be introduced, analog to status level schemes of flight operators, contributing to the customer driving more carefully to reach the new level as fast as possible. Punishment systems should only be implemented targeting groups, not individuals, to create a system of social control and obligation for the individual towards the group. A vital precondition is though, that the members of the group must be able to influence the composition of the group and their performance, as they are otherwise victims of a random group formation process, having to take the consequences of unknown other participants. The fifth major finding (5) discovered the willingness of participants to provide data in the ex ante and ex post contractual phase. This enables a better risk assessment and monitoring of the driving performance in order to secure that hidden characteristics are revealed and that there is as little room as possible for hidden action or hidden information. A possible data exchange of carsharing data with motor insurers is conceivable as a shadow no-claims bonus systems could be set up, allowing a more complete set of data about the driver that could be considered in order to reach a more balanced pricing for that specific customer in carsharing.Administración y Dirección de Empresa