Linear Models as Aids in Insurance Decision Making: The Estimation of Automobile Insurance Claims
Linear models have been successfully used to describe and predict judgement and behavior in a variety of settings. In this study a linear regression model was used to model claim costs for an automobile insurance account portfolio of a major British insurance company. The categorical independent var...
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| Main Authors: | , |
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| Format: | text |
| Language: | English |
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Institutional Knowledge at Singapore Management University
1987
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| Subjects: | |
| Online Access: | https://ink.library.smu.edu.sg/lkcsb_research/3894 https://doi.org/10.1016/0148-2963(87)90027-0 |
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| Institution: | Singapore Management University |
| Language: | English |
| Summary: | Linear models have been successfully used to describe and predict judgement and behavior in a variety of settings. In this study a linear regression model was used to model claim costs for an automobile insurance account portfolio of a major British insurance company. The categorical independent variables of policyholder age, area of residence, group (vehicle type), and no-claim discount (NCD) status were all found to be statistically significant influences on claim costs. It is argued that ex-post analyses of this nature are important to the managerial process of forecasting future claims and pricing insurance, as well as claims reserving decisions based on those forecasts. |
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