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We study the asymptotics of the ruin probability in the Cram\'er-Lundberg model with a modified notion of ruin. The modification is as follows. If the portfolio becomes negative, the asset is not immediately declared ruined but may survive…

Probability · Mathematics 2019-04-26 Frank Aurzada , Micha Buck

In this note we consider the two-dimensional risk model introduced in Avram et al. \cite{APP08} with constant interest rate. We derive the integral-differential equations of the Laplace transforms, and asymptotic expressions for the finite…

Probability · Mathematics 2012-07-17 Ze-Chun Hu , Bin Jiang

We study the ruin problem over a risk process described by a discrete-time Markov model. In contrast to previous studies that focused on the asymptotic behaviour of ruin probabilities for large values of the initial capital, we provide a…

Risk Management · Quantitative Finance 2013-08-26 Ilya Tkachev , Alessandro Abate

The ruin probability in the classical Brownian risk model can be explicitly calculated for both finite and infinite-time horizon. This is not the case for the simultaneous ruin probability in two-dimensional Brownian risk model. Resorting…

Probability · Mathematics 2018-11-13 Krzysztof Dȩbicki , Enkelejd Hashorva , Zbigniew Michna

We propose a stochastic model allowing property and casualty insurers with multiple business lines to measure their liabilities for incurred claims risk and calculate associated capital requirements. Our model includes many desirable…

Risk Management · Quantitative Finance 2021-12-07 Carlos Andrés Araiza Iturria , Frédéric Godin , Mélina Mailhot

The collective risk model differentiates usually between claims frequencies (and their distribution) and claim sizes (and their distribution). For the claims frequencies typically classical discrete distributions are considered, such as…

Risk Management · Quantitative Finance 2023-09-12 Dietmar Pfeifer

Our paper explores a discrete-time risk model with time-varying premiums, investigating two types of correlated claims: main claims and by-claims. Settlement of the by-claims can be delayed for one time period, representing real-world…

Risk Management · Quantitative Finance 2024-08-02 Dhiti Osatakul , Shuanming Li , Xueyuan Wu

We consider two insurance companies with endowment processes given by Brownian motions with drift. The firms can collaborate by transfer payments in order to maximize the probability that none of them goes bankrupt. We show that pushing…

Probability · Mathematics 2020-04-29 Peter Grandits , Maike Klein

The paper deals with a generalization of the risk model with stochastic premiums where dependence structures between claim sizes and inter-claim times as well as premium sizes and inter-premium times are modeled by…

Probability · Mathematics 2018-01-04 Olena Ragulina

In this paper, we introduce an insurance ruin model with adaptive premium rate, thereafter refered to as restructuring/refraction, in which classical ruin and bankruptcy are distinguished. In this model, the premium rate is increased as…

Probability · Mathematics 2013-06-21 Jean-François Renaud

Modeling insurance claim amounts and classifying claims into different risk levels are critical yet challenging tasks. Traditional predictive models for insurance claims often overlook the valuable information embedded in claim…

Applications · Statistics 2024-10-08 Yanxi Hou , Xiaolan Xia , Guangyuan Gao

We consider the problem of minimizing the probability of ruin by purchasing reinsurance whose premium is computed according to the mean-variance premium principle, a combination of the expected-value and variance premium principles. We…

Optimization and Control · Mathematics 2020-07-07 Xiaoqing Liang , Zhibin Liang , Virginia R. Young

We start by showing that the finite-time absolute ruin probability in the classical risk model with constant interest force can be expressed in terms of the transition probability of a positive Ornstein-Uhlenbeck type process, say X. Our…

Computational Finance · Quantitative Finance 2010-06-15 Ronnie L. Loeffen , Pierre Patie

We propose a model in which, in exchange to the payment of a fixed transaction cost, an insurance company can choose the retention level as well as the time at which subscribing a perpetual reinsurance contract. The surplus process of the…

Optimization and Control · Mathematics 2024-02-13 Salvatore Federico , Giorgio Ferrari , Maria-Laura Torrente

We obtain the distribution of the maximal average in a sequence of independent identically distributed exponential random variables. Surprisingly enough, it turns out that the inverse distribution admits a simple closed form. An application…

Probability · Mathematics 2019-06-25 Dimitris Cheliotis , Nickos Papadatos

The aim of this paper is to construct the confidence interval of the ultimate ruin probability under the insurance surplus driven by a L\'evy process. Assuming a parametric family for the L\'evy measures, we estimate the parameter from the…

Probability · Mathematics 2021-12-15 Yasutaka Shimizu

Following an article by Muller and Pflug, we study the adjustment coefficient of ruin theory in a context of temporal dependency. We provide a consistent estimator of this coefficient, and perform some simulations.

Statistics Theory · Mathematics 2009-01-05 H. Cossette , E. Marceau , V. Maume-Deschamps

We consider a diffusion approximation to an insurance risk model where an external driver models a stochastic environment. The insurer can buy reinsurance. Moreover, investment in a financial market is possible. The financial market is also…

Mathematical Finance · Quantitative Finance 2019-04-01 Matteo Brachetta , Hanspeter Schmidli

Due to its practical use, De Vylder's approximation of the ruin probability has been one of the most popular approximations in ruin theory and its application to insurance. Surprisingly, only heuristic and numerical evidence has supported…

Probability · Mathematics 2017-09-04 Azmi Makhlouf

If a given aggregate process $S$ is a compound mixed renewal process under a probability measure $P$, we provide a characterization of all probability measures $Q$ on the domain of $P$ such that $Q$ and $P$ are progressively equivalent and…

Probability · Mathematics 2024-08-02 Spyridon M. Tzaninis , Nikolaos D. Macheras