Public Health Crises, Product Pricing, and Risk Management: U.S. Life Insurance during the 1918–19 Influenza Pandemic
History of Economics eJournal(2020)
Abstract
Using a novel, hand-collected dataset of U.S. life insurance companies during the Influenza Pandemic of 1918–19, we show that high-exposure firms charged higher prices on new policies vis-à-vis less exposed firms. Since the pandemic surprisingly increased mortality rates among young adults, we argue that insurers used product pricing as a risk management tool to mitigate the probability of financial distress. Consistent with this channel, health shocks significantly impact firms’ exit and entry decisions depending on a state’s exposure to the disease. Finally, we show that competing explanations for the observed price differences find little support from the data.
MoreTranslated text
AI Read Science
Must-Reading Tree
Example
![](https://originalfileserver.aminer.cn/sys/aminer/pubs/mrt_preview.jpeg)
Generate MRT to find the research sequence of this paper
Chat Paper
Summary is being generated by the instructions you defined