For example, people who are insured with auto insurance may drive more recklessly than those who are not insured because they know that they can get compensation. In other words, because of insurance, people are bolder than before, and they are not as careful as before to prevent accidents. After the loss occurs, insurance may have a certain impact on the insured's motivation to reduce the loss, which is called moral hazard afterwards. For example, people who enjoy unemployment insurance may make less efforts when looking for a job than those who have the same conditions but no unemployment insurance. People with medical insurance will go to the hospital more than those without medical insurance.
1. Insurance is a Chinese word, pinyin is b m 4 o xi m 4 n, and English is insurance or insurance, which means safe and reliable guarantee; Later, it was extended to a guarantee mechanism, a tool for planning life finance, a basic means of risk management under the condition of market economy, and an important pillar of financial system and social security system. Insurance refers to the commercial insurance behavior in which the applicant pays the insurance premium to the insurer according to the contract, and the insurer bears the responsibility of paying the insurance premium for the property losses caused by the possible accidents agreed in the contract, or when the insured dies, suffers from disability, illness or reaches the age and time limit agreed in the contract. From the perspective of economics, insurance is a financial arrangement to share the loss of accidents; From the legal point of view, insurance is a contractual act, a contractual arrangement in which one party agrees to compensate the other party for losses; From a social point of view, insurance is an important part of the social and economic security system and a "subtle stabilizer" for social production and social life; From the perspective of risk management, insurance is a method of risk management.
2. Moral hazard is a phenomenon that under the condition of asymmetric information, uncertain or incomplete contracts make responsible economic actors not bear all the consequences of their actions, and at the same time maximize their own utility and make behaviors that are not conducive to others. This concept originated from marine insurance. 1963 Arrow, an American mathematical economist, introduced this concept into economics and pointed out that moral hazard is the tendency of individual behavior to change because of the protection of insurance. It is an objective opportunistic behavior. Compared with adverse selection, it is a risk caused by one party's difficulty in observing or supervising the behavior of the other party.