The application of loss modelling in pricing for group health insurance in the Philippines
This study aimed to demonstrate the application of risk management and loss modeling on the estimation of health insurance product prices and the advantages and disadvantages of frequency-severity method over the traditional loss-cost approach in which only claims severity is estimated. It addressed...
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| Main Authors: | , |
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| 格式: | text |
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Animo Repository
2018
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| 主題: | |
| 在線閱讀: | https://animorepository.dlsu.edu.ph/faculty_research/5962 |
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| 機構: | De La Salle University |
| 總結: | This study aimed to demonstrate the application of risk management and loss modeling on the estimation of health insurance product prices and the advantages and disadvantages of frequency-severity method over the traditional loss-cost approach in which only claims severity is estimated. It addressed the existing pricing concerns by introducing the loss model driven frequency-severity method widely used in many insurance markets around the world. The results of the study showed that by classifying data according to its similar characteristics, the risk of wrongly specifying a best-fit probability distribution is minimized, percentiles can be determined through Maximum Likelihood Estimation avoiding the use of the central limit theorem and the resulting segmented pricing equation is more effective in discovering the primary pricing drivers. Claims data were right-skewed heavy-tailed and best-fitted into the Weibull distribution as determined by Anderson Darling and p-value estimates. The modeled premiums were approximately twenty-percent higher than the principal premiums. |
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