Customer Price Sensitivities in Competitive Automobile Insurance Markets. (arXiv:2101.08551v2 [stat.AP] UPDATED)

Insurers are increasingly adopting more demand-based strategies to
incorporate the indirect effect of premium changes on their policyholders'
willingness to stay. However, since in practice both insurers' renewal premia
and customers' responses to these premia typically depend on the customer's
level of risk, it remains challenging in these strategies to determine how to
properly control for this confounding. We therefore consider a causal inference
approach in this paper to account for customers' price sensitivity and to
deduce optimal, multi-period profit …

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