INSURANCE PRODUCT RUIN EVENT ANALYSIS WITHEXTERNAL FUNDS AT DISCRETE TIME

• Main Author: Esar Salsabil, Rahmat
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/76358
• Institution: Institut Teknologi Bandung

In actuarial science, there is a concept known as the theory of ruin. This concept is used to ensure the continuity of operational insurance companies. In the nineties, several large insurance companies in the United States, the United Kingdom, and Japan experienced bankruptcy due to deficiencies in researching the resilience of insurance companies. In the current economic situation, insurance companies must strive to achieve success in their business. Insurance companies can compete by leveraging advanced technology, providing the best quality products, and effectively managing human resources through internal and external funds. In this study, calculations are performed using the approach of ruin theory and implementing a strategy that involves external funds. These calculations use a recursive method. The recursive method used in this study involves four variables: surplus, external funds, ruin time, and time elapsed after updated claims, which change as time variables in the recursive process. This research concludes that external funds reduce the risk of bankruptcy, and an increase in the maximum debt limit also decreases the risk of bankruptcy.