Various modeling approaches in auto insurance pricing

다양한 모형화를 통한 자동차 보험가격 산출

  • Kim, Myung-Joon (Automobile Insurance Product Pricing Dept., Samsung Fire & Marine Insurance Co.) ;
  • Kim, Yeong-Hwa (Department of Statistics, Chung-Ang University)
  • 김명준 (삼성화재해상보험주식회사) ;
  • 김영화 (중앙대학교 자연과학대학 통계학과)
  • Published : 2009.05.31

Abstract

Pricing based on proper risk has been one of main issues in auto insurance. In this paper, we review how the techniques of pricing in auto insurance have been developed and suggest a better approach which meets the existing risk statistically by comparison. The generalized linear model (GLM) method is discussed for pricing with different distributions. With GLM approach, the distribution of error assumed plays an main role for the best fit corresponding to the characteristics of dependent variables. Tweedie distribution is considered as one of error distributions in addition to widely used Gamma and Poisson distribution. With these different types of error assumption for estimating the proper premium in auto insurance, various modeling approaches are possible. In this paper, various modeling approaches with different assumptions for estimating proper risk is discussed and also real example is given by assuming different.

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