Identifying customers' risk in auto insurance and calculating distorted insurance premiums

Sepahvand, S.; Ramandi, S.; Mahmoudvand, R.

doi:10.22056/ijir.2022.04.05

Document Type : Original Research Paper

Authors

¹ Sarmad Insurance Company, Tehran, Iran

² Day Insurance Company, Tehran, Iran

³ Department of Statistics, Faculty of Mathematical Sciences, Bou-Ali Sina University, Hamadan, Iran

https://doi.org/10.22056/ijir.2022.04.05

Abstract

CONCLUSION: If low-risk and high-risk customers are not separated, the amount of insurance premium for all members of society is the same and equal to 17,012,700 Rials. This amount will be a large amount for people with low risk or people without damage, so after classifying customers and recalculating the insurance premium for low risk and high risk people, it will be calculated as 5,610,700 and 54,295,700 Rials respectively. The big difference between the insurance premiums of the two classes shows the big difference in the amount of risk. Therefore, in the end, the importance of classifying the society of insurance policyholders is an essential issue. There is no limit in using this method and when the distribution of damages is heavy, using this method can be very useful and efficient.

Keywords

Main Subjects

Risk assessment in insurance

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Iranian Journal of Insurance Research

Identifying customers' risk in auto insurance and calculating distorted insurance premiums

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Volume 11, Issue 4 - Serial Number 42
October 2022
Pages 321-338

Identifying customers' risk in auto insurance and calculating distorted insurance premiums

References

References

Letters to Editor

Send comment about this article

Volume 11, Issue 4 - Serial Number 42October 2022Pages 321-338

Volume 11, Issue 4 - Serial Number 42
October 2022
Pages 321-338