Fatalities among Civil Infrastructure Workers: Variable Annuity with Guaranteed Minimum Death Benefits Approach

Abstract

AbstractMany studies are concerned with monitoring, evaluating, expanding, repairing, replacing, financing, or otherwise sustaining the civil infrastructure. Few studies address the ongoing and evolving financial problems associated with the workers responsible for developing civil infrastructure development. According to U.S. federal statistics, civil infrastructure activities are responsible for 22% of all work-related fatalities—the highest among all industries. In 2008, 429,000 nonfatal injuries and 1,005 fatal injuries were recorded on job sites. However, civil infrastructure workers still have some of the weakest coverage of health and retirement benefits. It is crucial to have a strong system that protects workers and their families in cases of work-related fatal and nonfatal injuries. This paper developed a financial model incorporating a variable annuity embedded with guaranteed minimum death benefits. The model is based on the principles of insurance pricing, option theory, Monte Carlo simulatio...