Related papers: Pay-As-You-Drive Insurance Pricing Model
Usage-based insurance (UBI) uses telematics to align premiums with risk and encourage safe driving. However, deploying these programs is challenging due to heavy-tailed claim costs, nonstationary driver behavior, and limited incentive…
Autonomous vehicles (AV) look set to become common on our roads within the next few years. However, to achieve the final breakthrough, not only functional progress is required, but also satisfactory safety assurance must be provided. Among…
Accuracy and interpretability of a (non-life) insurance pricing model are essential qualities to ensure fair and transparent premiums for policy-holders, that reflect their risk. In recent years, the classification and regression trees…
A case study of the Singapore road network provides empirical evidence that road pricing can significantly affect commuter trip timing behaviors. In this paper, we propose a model of trip timing decisions that reasonably matches the…
In actuarial research, a task of particular interest and importance is to predict the loss cost for individual risks so that informative decisions are made in various insurance operations such as underwriting, ratemaking, and capital…
In high-risk environments, traditional indemnity insurance is often unaffordable or ineffective, despite its well-known optimality under expected utility. We compare excess-of-loss indemnity insurance with parametric insurance within a…
Powered with telematics technology, insurers can now capture a wide range of data, such as distance traveled, how drivers brake, accelerate or make turns, and travel frequency each day of the week, to better decode driver's behavior. Such…
Extant literature on fair pricing methods for actuarial contexts has primarily focused on the regression setting. While such approaches are well-suited to short-term products, it is unclear how they generalize to long-term products, whose…
Traditional insurance pricing relies on risk-based principles that ensure actuarial fairness and solvency but do not explicitly account for policyholders' price sensitivity. We formulate insurance pricing as a decision-making problem and…
Ride-pooling, to gain momentum, needs to be attractive for all the parties involved. This includes also drivers, who are naturally reluctant to serve pooled rides. This can be controlled by the platform's pricing strategy, which can…
This paper considers the problem of predicting the number of events that have occurred in the past, but which are not yet observed due to a delay. Such delayed events are relevant in predicting the future cost of warranties, pricing…
There will be a long time when automated vehicles are mixed with human-driven vehicles. Understanding how drivers assess driving risks and modelling their individual differences are significant for automated vehicles to develop human-like…
Urban traffic systems worldwide are suffering from severe traffic safety problems. Traffic safety is affected by many complex factors, and heavily related to all drivers' behaviors involved in traffic system. Drivers with aggressive driving…
In this note we study the optimal dividend problem for a company whose surplus process, in the absence of dividend payments, evolves as a generalized compound Poisson model in which the counting process is a generalized Poisson process.…
Rate change calculations in the literature involve deterministic methods that measure the change in premium for a given policy. The definition of rate change as a statistical parameter is proposed to address the stochastic nature of the…
Consider two insurance companies (or two branches of the same company) that receive premiums at different rates and then split the amount they pay in fixed proportions for each claim (for simplicity we assume that they are equal). We model…
Birth rates have dramatically decreased and, with continuous improvements in life expectancy, pension expenditure is on an irreversibly increasing path. This will raise serious concerns for the sustainability of the public pension systems…
The prediction of future insurance claims based on observed risk factors, or covariates, help the actuary set insurance premiums. Typically, actuaries use parametric regression models to predict claims based on the covariate information.…
This paper proposes a new family of Tweedie-based ratemaking models that explicitly account for mid-term policy cancellations. Using an automobile insurance dataset from a Canadian insurer, we document a marked difference in claims…
The design of integrated mobility-on-demand services requires jointly considering the interactions between traveler choice behavior and operators' operation policies to design a financially sustainable pricing scheme. However, most existing…