Deterministic analysis of the bonus-malus system

Barbara Cieślik and Damian Sulik
Additional contact information
Barbara Cieślik: Szkoła Główna Handlowa w Warszawie
Damian Sulik: Szkoła Główna Handlowa w Warszawie

Collegium of Economic Analysis Annals, 2015, issue 37, 283-304

Abstract: Many books and papers have discussed the probabilistic analysis concerning the bonus-malus systems (BMS). However, the deterministic approach leads to similar results and is much easier and more understandable to both sides of the insurance contract: the insurers and the customers. Its simplicity is its power – deterministic analysis can show the insurer how their clients see their system and what is important to them when they are comparing and choosing among different BMSs on the market. This article presents an example of a deterministic analysis of two systems offered by UNIQA in Poland – the old one and the new one. They have been chosen as an illustration of one of the trends that can be observed in the Polish market – implementing systems that offer fast promotion to the best class. Surprisingly, our results indicate that the new system is not that attractive to better drivers. In fact, those who benefit more after the change are the worst drivers.

Keywords: bonus-malus system; deterministic analysis; vehicle insurance (search for similar items in EconPapers)
Date: 2015
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
http://rocznikikae.sgh.waw.pl/p/roczniki_kae_z37_13.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sgh:annals:i:37:y:2015:p:283-304

Access Statistics for this article

Collegium of Economic Analysis Annals is currently edited by Joanna Plebaniak, Beata Czarnacka-Chrobot

More articles in Collegium of Economic Analysis Annals from Warsaw School of Economics, Collegium of Economic Analysis Contact information at EDIRC.
Bibliographic data for series maintained by Michał Bernardelli ().