Non-risk price discrimination in insurance: market outcomes and public policy

This paper considers price discrimination in insurance, defined as systematic price variations based on individual customer data but unrelated to those customers’ expected losses or other marginal costs (sometimes characterised as “price optimisation”). An analysis is given of one type of price discrimination, “inertia pricing,” where renewal prices are higher than prices for risk-equivalent new customers. The analysis suggests that the practice intensifies competition, leading to lower aggregate industry profits; customers in aggregate pay lower prices, but not all customers are better off; and the high level of switching between insurers is inefficient for society as a whole. Other forms of price discrimination may be more likely to increase aggregate industry profits. Some public policy issues relating to price discrimination in insurance are outlined, and possible policy responses by regulators are considered. It is suggested that competition will tend to lead to increased price discrimination over time, and that this may undermine public acceptance of traditional justifications for risk-related pricing

Insights into structure and dynamics of (Mn,Fe)O_x-promoted Rh nanoparticles

The mutual interaction between Rh nanoparticles and manganese/iron oxide promoters in silica-supported Rh catalysts for hydrogenation of CO to higher alcohols was analyzed by applying a combination of integral techniques including temperature-programmed reduction (TPR), X-ray photoelectron spectroscopy (XPS), X-ray absorption (XAS) and Fourier transform infrared (FTIR) spectroscopy with local analysis by using high angle annular dark-field scanning transmission electron microscopy (HAADF-STEM) in combination with energy dispersive X-ray spectroscopy (EDX). The promoted catalysts show reduced CO adsorption capacity as evidenced by FTIR spectroscopy, which is attributed to a perforated core-shell structure of the Rh nano-particles in accordance with the microstructural analysis by electron microscopy. Iron and manganese occur in low formal oxidation states between 2+ and zero in the reduced catalysts as shown by TPR and XAS. Infrared spectroscopy measured in diffuse reflectance at reaction temperature and pressure indicates that partial coverage of the Rh particles is maintained at reaction temperature under operation and that the remaining accessible metal adsorption sites might be catalytically less relevant because hydrogenation of adsorbed carbonyl species at 523 K and 30 bar hydrogen essentially failed. It is concluded that Rh⁰ is poisoned due to adsorption of CO under reaction conditions of CO hydrogenation. The active sites are associated either with a (Mn,Fe)O_x (x<0.25) phase or species at the interface between Rh and its co-catalyst (Mn,Fe)O_x