Adjusting the Premium Relativities in a Bonus-Malus System: An Integrated Approach Using the First Claim Time and the Number of Claims
Tan Chong It () and
Additional contact information
Mahmoudvand Rahim: Department of Statistics, Bu-Ali Sina University, Hamedan, Iran
Tan Chong It: Department of Applied Finance and Actuarial Studies, Macquarie University, New South Wales, Australia
Abbasi Narges: Department of Statistics, Payame Noor University, I. R.Iran
Asia-Pacific Journal of Risk and Insurance, 2017, vol. 11, issue 2, 19
In this paper, we propose an integrated approach to adjust the premium relativities in a bonus-malus system by using the information of the first claim time (expressed in terms of sub-period in a year) and the number of claims reported by individual policyholder. We provide a formal representation for the newly proposed structure and derive the analytical expressions for the adjusted premium relativities. Other things being equal, a lower adjusted premium relativity is imposed for an earlier sub-period of the first claim made, whereas policyholders with more claims are subject to a higher adjusted premium relativity.
Keywords: bonus-malus system; premium relativities; claims count (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
https://www.degruyter.com/view/j/apjri.2017.11.iss ... -0038.xml?format=INT (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bpj:apjrin:v:11:y:2017:i:2:p:19:n:3
Ordering information: This journal article can be ordered from
Access Statistics for this article
Asia-Pacific Journal of Risk and Insurance is currently edited by Michael R. Powers
More articles in Asia-Pacific Journal of Risk and Insurance from De Gruyter
Series data maintained by Peter Golla ().