FIRE INSURANCE POLICY MODEL FOR TWO PLAYERS (INSURANCE COMPANY AND POLICYHOLDER)
Fire insurance is a part of general insurance that covers loss of property due to fire, lightning, explosion, a crash of an aeroplane, and smoke originating from the insured property. Losses due to fire often provide substantial losses. Fire insurance is one solution for this risk. In this industry,...
Saved in:
| Main Author: | |
|---|---|
| Format: | Theses |
| Language: | Indonesia |
| Online Access: | https://digilib.itb.ac.id/gdl/view/49765 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | Fire insurance is a part of general insurance that covers loss of property due to fire, lightning, explosion, a crash of an aeroplane, and smoke originating from the insured property. Losses due to fire often provide substantial losses. Fire insurance is one solution for this risk. In this industry, both insurance company and policyholder expect optimum profits. This study uses game theory to find solutions from the interaction of insurance company and policyholder with a case study of fire insurance occupation code 2937. The concept of the 2-player Stackelberg game is applied. Insurance company has three strategies, namely offering fire insurance policies A, B, or C in order of the smallest sum insured. Meanwhile, policyholder has two strategies, namely buying or refusing. The objective function of both parties states the benefits of choosing the strategy. Policyholder profits are modelled using the utility function assuming risk aversion.
This paper provides the results of calculating the premiums for the three fire insurance policies offered. Obtained that the policy with the greatest coverage provides the greatest benefit for the insurance company without eliminating the policyholder's desire to buy the policy. So the best scenario of this interaction is the insurance company offers policy C and the policyholder buys the policy. |
|---|