Professor Xiang Hu, a researcher of the base, has published a collaborative paper titled "Construction and Evaluation of Optimal BMS: Comprehensive Perspective Based on Number of Claims and Individual Claim Size" in Journal of Applied Statistics and Management (Issue 02, 2024).

Journal of Applied Statistics and Management is an academic journal supervised by the China Association for Science and Technology and sponsored by the Chinese Association of Applied Statistics. It focuses on theoretical and applied research in mathematical statistics and management science, covering methodologies such as parameter estimation, hypothesis testing, and regression analysis, as well as empirical studies in economics, finance, biomedicine, and other fields.

Abstract:

Bonus-malus system (BMS) is a premium adjustment mechanism widely used in the commercial auto insurance to set the posterior premium for the next contract period based on a policyholder's claim history. It is usually assumed that the a priori premium assigned to each policyholder adjusts based only on the number of claims, However, not all accidents produce the same individual claim sizeand thus it does not seem fair to penalize all policyholders in the same way when claims are presented. By a Bayesian methodology, this paper is devoted to the design of BMS involving different sources of a priori information, including the experiences of the number of claims and the individual claim size. The parameters of the BMS are estimated by applying the maximum likelihood method. An empirica analysis using an auto insurance claims database from an insurance company of China is presented. The results indicate that the proposed models could distinguish between claims with different size and then penalize policyholders depending on their experience with respect to the diferent types of claim, which effectively improve the accuracy of the a posteriori ratemaking.

Keywords：bonus-malus system; Bavesian; methodology; number of claims; individual claim size; a Dosteriori rating

Link：http://tongji.llyj.net/lunwen/itemid-247156.shtml

Teacher profile

Xiang Hu, Professor at the School of Finance, Zhongnan University of Economics and Law, and a recipient of the university’s "Wenlan Young Scholar" title, specializes in insurance actuarial science and risk management. He has published over 20 papers in leading academic journals including Insurance: Mathematics and Economics, ASTIN Bulletin, Scandinavian Actuarial Journal, North American Actuarial Journal, Statistical Research, and Insurance Research. He has led or participated in multiple research projects funded by the National Natural Science Foundation of China and the National Social Science Fund of China.