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...

Full description

Saved in:
Bibliographic Details
Main Authors: Baria, Soleil G., Tiu, Tomas S.
Format: text
Published: Animo Repository 2018
Subjects:
Online Access:https://animorepository.dlsu.edu.ph/faculty_research/5962
Tags: Add Tag
No Tags, Be the first to tag this record!
Institution: De La Salle University
id oai:animorepository.dlsu.edu.ph:faculty_research-6846
record_format eprints
spelling oai:animorepository.dlsu.edu.ph:faculty_research-68462022-05-31T02:14:06Z The application of loss modelling in pricing for group health insurance in the Philippines Baria, Soleil G. Tiu, Tomas S. 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. 2018-11-01T07:00:00Z text https://animorepository.dlsu.edu.ph/faculty_research/5962 Faculty Research Work Animo Repository Health insurance—Rates Health insurance—Finance Finance and Financial Management
institution De La Salle University
building De La Salle University Library
continent Asia
country Philippines
Philippines
content_provider De La Salle University Library
collection DLSU Institutional Repository
topic Health insurance—Rates
Health insurance—Finance
Finance and Financial Management
spellingShingle Health insurance—Rates
Health insurance—Finance
Finance and Financial Management
Baria, Soleil G.
Tiu, Tomas S.
The application of loss modelling in pricing for group health insurance in the Philippines
description 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.
format text
author Baria, Soleil G.
Tiu, Tomas S.
author_facet Baria, Soleil G.
Tiu, Tomas S.
author_sort Baria, Soleil G.
title The application of loss modelling in pricing for group health insurance in the Philippines
title_short The application of loss modelling in pricing for group health insurance in the Philippines
title_full The application of loss modelling in pricing for group health insurance in the Philippines
title_fullStr The application of loss modelling in pricing for group health insurance in the Philippines
title_full_unstemmed The application of loss modelling in pricing for group health insurance in the Philippines
title_sort application of loss modelling in pricing for group health insurance in the philippines
publisher Animo Repository
publishDate 2018
url https://animorepository.dlsu.edu.ph/faculty_research/5962
_version_ 1783960746556653568