Damages after deregulation - dynamic effects in the German motor vehicle insurance industry

Since 1994 the highly regulated German insurance market have been deregulated. Insurers have been allowed to calculate their premiums and to offer contracts without regulation. Especially in the motor vehicle insurance several innovations were introduced: age of car, garage, kilometers per year and so on are decisive to get rebates or additional premiums. According to the traditional literature about adverse selection the paper analyzes whether these tariff items are instruments to select better between low and high risks than before regulation. Age of car and kilometers variables seem to have such selecting effects for one or two years.