Limits The Insured Amount to Reduce Loss?: Use the Group Accident Insurance as an Example

Abstract

Property-Liability insurance Industry pays much attention to the loss ratio of accident insurance. From 2005 to 2011, average loss ratio is 45.24 % in Property-Liability insurance industry and 34.31 % in Life insurance Industry. Most important to achieve the maximum benefit for reducing losses based on the minimum cost of underwriting for property-liability insurer’s underwriters. The purpose of this research is to examine limit insured amount can reduce the loss or not and whether business quality control by underwriting system. We complied data on group accident insurance from a Property-Liability Company in Taiwan from 2009 to 2010. There are 4,504 samples in group features. We use \( \chi^{2} \) test, test analysis and ordered logistic regression verify the relevance of the insured amount and loss, business quality control effect and the factor impact the loss. The results of the analysis show that the there was a correlation between insured amount and loss, business quality control that effectively reduce medical loss, Variables of AD&D, MR/AD&D and DHI/AD&D have a significant influence for the loss. The result of the analysis not only help underwriter to adjust underwriting guidelines but also reduce loss amount. Moreover, our results have practical implications for the Property-Liability insurance industry in Taiwan.