ZLATOŠOVÁ, Silvie. A Non-asymptotic Automobile Bonus-malus System with Varying Transition Rules. In Josef Nešleha Lukáš Marek Miroslav Svoboda Zuzana Rakovská. EUROPEAN FINANCIAL SYSTEMS 2019. Brno: Masarykova univerzita, 2019. p. 650-655, 6 pp. ISBN 978-80-210-9338-6.
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Basic information
Original name A Non-asymptotic Automobile Bonus-malus System with Varying Transition Rules
Authors ZLATOŠOVÁ, Silvie (203 Czech Republic, guarantor, belonging to the institution).
Edition Brno, EUROPEAN FINANCIAL SYSTEMS 2019, p. 650-655, 6 pp. 2019.
Publisher Masarykova univerzita
Other information
Original language English
Type of outcome Proceedings paper
Field of Study 10102 Applied mathematics
Country of publisher Czech Republic
Confidentiality degree is not subject to a state or trade secret
Publication form electronic version available online
RIV identification code RIV/00216224:14560/19:00110979
Organization unit Faculty of Economics and Administration
ISBN 978-80-210-9338-6
UT WoS 000503222600078
Keywords in English bonus-malus system; optimal relativities; non-asymptotic criterion; the efficiency of a bonus-malus system
Tags Reviewed
Changed by Changed by: Mgr. Pavel Sedláček, učo 23217. Changed: 11/5/2020 14:11.
In this paper, we examine a non-asymptotic criterion for a bonus-malus system in vehicle insurance, and we combine it with varying transition rules. Policies are in effect only during a finite number of insurance periods. If most of the policies are far from a stationary state, it is useful to change the criterion so that to consider the rating error for new policies and policies of medium age too. Therefore we use a bonus-malus system based on minimization weighted average of the expected square rating errors for selected insurance periods. We calculate the relative premium associated with each level of the bonus-malus system. Finally, we compare our proposed bonus-malus system with the system from the Czech Insurance Company. We find that the proposed examples of non-asymptotic bonus-malus system are more effective than the current system used by the Czech Insurance Company.
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