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Allowance for Cost of Claims in Bonus-Malus Systems

Published online by Cambridge University Press:  29 August 2014

Jean Pinquet
Jean Pinquet*
Affiliation:
THEMA, University Paris X, 92001 Nanterre, France
*
Université de Paris X, U.F.R. de Sciences Economiques 200, Avenue de la République 92001 NANTERRE CEDEX, Phone: 33 1 49 81 72 45; Fax: 33 1 40 97 71 42; E-mail: [email protected]
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Abstract

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The objective of this paper is to make allowance for cost of claims in experience rating. We design here a bonus-malus system for the pure premium of insurance contracts, from a rating based on their individual characteristics. Empirical results are presented, that are drawn from a French data base of automobile insurance contracts.

Keywords

Bayesian and heterogeneous modelsNumber and cost residualsBonus-malus for frequency of claimsaverage cost per claimand pure premium
Type
Articles
Information
ASTIN Bulletin: The Journal of the IAA , Volume 27 , Issue 1 , May 1997 , pp. 33 - 57
Copyright
Copyright © International Actuarial Association 1997

References

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