Abstract
Based on various limited claim modes and the idea of option pricing, we build a pricing model system for small and micro loan insurance that conforms to the actuarial principle. It is found that different limited claim modes endow loan insurance contracts with various option attributes, which can be used to price small and micro loan insurance. Moreover, under the conditions of setting the upper and lower limits of claims separately or simultaneously, the pricing laws of loan insurance determined by such factors as insurance period may differ. Compared with the mode of relative deductible, the adoption of the mode of absolute deductible as the lower limit of a claim is more conducive to reducing the price of small and micro loan insurance. Our study provides a set of feasible theoretical solution for small and micro loan insurance pricing from a new perspective of limited claims.
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