Large Number Of Policies Research Articles

Fluctuating interest rates

The annual premium for a life assurance contract is obtained by equating the expected discounted value of the sum payable on death to the expected discounted value of the series of premiums, and loading the resultant net premium for expenses and contingencies. The approach is essentially deterministic. An adequate stochastic model of mortality is readily available, but it is of limited practical value. A life office writes a large number of policies on independent lives and, apart from the effects of a few very large policies, the overall mortality behaviour of its portfolio is effectively deterministic.

Fluctuating interest rates

The annual premium for a life assurance contract is obtained by equating the expected discounted value of the sum payable on death to the expected discounted value of the series of premiums, and loading the resultant net premium for expenses and contingencies. The approach is essentially deterministic. An adequate stochastic model of mortality is readily available, but it is of limited practical value. A life office writes a large number of policies on independent lives and, apart from the effects of a few very large policies, the overall mortality behaviour of its portfolio is effectively deterministic.

Technical Problems of Flood Insurance

Flood insurance from engineering standpoint with particular emphasis on determination of flood probability from relatively short records, estimates of mean annual flood damage to particular properties for establishing self supporting premium rates, spreading risk of flood damage over large number of policies, and related technical problems involved in setting up any program of flood insurance.

Office Premiums.

There are three conditions which must be borne in mind in the calculation of office premiums.Necessity for adequacy. Every premium charged must be sufficient to cover the risk and the expenses which are incurred in connection with the particular policy in question, and also to provide a reasonable contribution towards the general expenses and to leave a margin for profit. The fact that several offices charge very low rates for whole of life without-profit policies seems to indicate that the necessity of complying with this condition is a question on which some difference of opinion exists.Influence of competition. The rates should compare well with those charged by other companies. An office which charges exceptionally low rates at certain ages or for certain classes of assurance will find that it is issuing a large number of policies in these sections of the business, and that people are going elsewhere for the classes of policy for which its rates are high.Principle of consistency. The rates charged at differentages, and for different classes of assurance, should be consistent, and the differences between the with-profit and without-profitrates should be reasonable in view of the rate of bonus whichthe office is, in normal times, in the habit of granting.

On some methods of grouping Policies for the Purpose of Valuation

In dealing with the valuation of a large number of policies, the method of grouping is of very great importance, and although there is probably nothing new in any of the suggested methods, I venture to hope that a discussion of this subject will be of some utility.