Seminar: Developments in the Hybrid Market for the Dutch Reintegration Scheme for the Partially Capable

Time: 13.00-14.00 hours
Location: CPB-office, Van Stolkweg 14, The Hague

Presentation: Kim Timmer (UWV/Milliman)

Discussant: Krista Hoekstra (CPB)

Language: English

Registration: Please register by sending an email to seminars@cpb.nl.

Abstract subject:
In this paper I will look at the developments in the hybrid market for Dutch disability insurance. This hybrid system, in which there is both a public insurer as well as multiple private insurers is characterized by the antithetical natures of the financing methods in the public and private sector. In particular, the public sector finances their disability insurance via the pay-as-you-go scheme whereas the private sector uses a funded scheme. In this thesis I will research past and future developments in this scheme by first of all describing the different premium setting systems and looking at the developments of the premiums in the public and private sector, and secondly by describing the transitions of employers between public and private insurance showing among other things that company characteristics play a much less important role than premium differences for the transition from private to public insurance, contrary to what is the case for the transition from public to private insurance. Using a company risk model and applying microsimulation methods I will estimate and forecast the developments of the benefit costs and premiums in the public and private sector, as well as the transitions between public and private insurance. In the early years private insurers offered very competitive premiums and managed to increase their market share substantially, but this trend has reversed since 2014. I will show among other things that though this current situation of decreasing private market share will stabilize between now and 2018 if there are no changes to the system, altering the rules and assumptions in the system could create an unstable situation.

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