Discussion Paper 16

Measurement of Insurance Output: Application of the Gross Output Approach

Martin Weale

National Institute of Economic and Social Research (NIESR), London



This paper discusses the measurement of the gross output of the insurance sector, arguing that this should be done with reference to this risk carried. The implication of this is that an increase in insurance premia as a result of an increase in risk is treated as a volume increase and not a price increase. The consequences of this approach for the measurement of the gross output associated with life insurance and annuity provision as well as general insurance is discussed. It is shown that changes in annuity rates resulting from changes to mortality rates should be treated as volume changes. The approach is illustrated with reference to data on proerty insurance drawn from the United Kingdom’s Living Conditions and Food Survey. The quality of the data means, however, that the calculations should be regarded as purely illustrative.


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Measurement of Insurance Output: Application of the Gross Output Approach


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