Privatisation in practice A study from an insurance perspective into the effects of privatisation of public sickness- and disability programs in The Netherlands, Germany and Canada

This thesis aims to identify the effects of privatisation of public disability programs in The Netherlands, Germany and Canada. It does so from an insurance perspective (defined as: seeking a balance between the extent of cover and its cost). Subsequently, some conclusions are drawn as regards an optimal allocation of roles between ‘public’ and ‘private’ in disability insurance.
Both public and private disability insurance are being dominated by an ‘inconvenient truth’, the presence of behavioural effects. Consequently, the same applies to the effects of privatisation. Other findings are – inter alia – that market failure (often quoted as the rationale for state intervention) is not an issue, but that demand anomalies are.
The thesis concludes that whilst public insurance is probably the best way to address demand anomalies, private insurers are better equipped to deal with behavioural effects. It therefore suggests that in an optimal allocation of roles between’ public’ and ‘private’ public disability insurance should be restricted to ‘basic’ cover (that is less exposed to behavioural effects) and leave it to private insurers to provide additional cover. In this way a balance between ‘public’ and ‘private’ will contribute to the required balance between the extent of cover and cost.
Casper de Jong graduated in Dutch Law from Leyden University (Netherlands) in 1969. He worked some thirty years in the insurance industry and held management and supervising positions in several countries. He wrote this thesis after he retired.