Pay-As-You-Drive Insurance Pricing Model

Safoora Zarei and Ali R. Fallahi

Papers from arXiv.org

Abstract: Every time drivers take to the road, and with each mile that they drive, exposes themselves and others to the risk of an accident. Insurance premiums are only weakly linked to mileage, however, and have lump-sum characteristics largely. The result is too much driving, and too many accidents. In this paper, we introduce some useful theoretical results for Pay-As-You-Drive in Automobile insurances. We consider a counting process and also find the distribution of discounted collective risk model when the counting process is non-homogeneous Poisson.

Date: 2019-12
New Economics Papers: this item is included in nep-ias, nep-rmg and nep-tre
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Published in American Journal of Statistics and Actuarial Science, Vol.2, Issue 1, pp 1 - 9, 2020

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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:1912.09273

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