Economics, Econometrics and Finance
2 years ago

Maximizing Incentives in Insurance Sector Boosts Agent Performance and Profits

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Lecture notes on data engineering and communications technologies
Agency Theory: Designing Optimal Incentives in the Insurance Sector
Fernando Turrado García, Ana Lucila Sandoval Orozco, Pilar García Pineda, Luis Javier García Villalba

Paper Summary

Incentives play a crucial role in the insurance sector to align agent actions with company goals. A poorly designed incentive system can lead to financial loss or be unattainable for agents. To address this issue, a method using mixed integer linear optimization has been developed to ensure the effectiveness of incentives in the insurance industry.

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