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Two echelon supply chain with price dependent demand and premium payment scheme

Supply chain mechanisms that deal with price variation and shortage gaming needs special attention because both are considered as the main causes of the bullwhip effect. Shortage gaming, forces capacity-constrained supplier to curtail the supply to manage the demand of retailers from existing capacity. To avoid the risk of shortages, retailers manipulate their demand and generate the bullwhip effect. Moreover, price variation because of price-dependent demand and premium payment schemes also causes the bullwhip effect. Hence, in the present paper, an attempt has been made to investigate a two-echelon supply chain containing one supplier and N retailers under assumptions of the limited capacity constraint and price-dependent demand. Two mathematical models have been developed to decide extended capacity and premium payment scheme. It has been claimed that the presented models mitigate the bullwhip effect in the stated scenario. Numerical analysis has been presented along with the analysis of sensitive factors.

Lessons from China on different approaches to pension coverage extension

AbstractAchieving universal pension coverage is both an aspiration and a challenge for many developing economies. Traditional contributory schemes are less effective in extending pension coverage to workers who are not in the formal sectors of the economy. As an alternative, non‐contributory schemes have gained popularity in recent years. China’s pension reforms mirror this global trend. The introduction of a contribution‐based pension scheme for urban employees (Employees’ Pension) was followed by a scheme for rural and urban residents (Residents’ Pension), which is partly government financed and partly contributory, with multiple options for premium payment. This study uses nationally representative survey data collected in 2016 to compare the inclusiveness of the two schemes. It finds that access to the Residents’ Pension scheme is more equal than the Employees’ Pension. Lower status workers in terms of education, employment, income and hukou‐migration are more likely to participate in the Residents’ Pension as opposed to the Employees’ Pension, compared with higher status workers. The Chinese experience suggests that a workable solution for pension extension in low‐ and middle‐income countries is to have a scheme that is flexible, affordable and responsive to the diverse needs of the population.

Two echelon supply chain with price dependent demand and premium payment scheme

Two echelon supply chain with price dependent demand and premium payment scheme

Precommitment-based Pricing

In service marketing, customers typically pay more when they use more. Based on this principle, various non-linear pricing plans or flat-rate tariffs attempt to lure customers into higher use and higher-revenue contracts. An emerging marketing practice we term precommitment-based pricing turns these principles around and asks customers to pay extra when they use the service too little. For example, a local fitness club offers customers a discount when they reach a minimum training frequency, and those who fall short pay a premium. This form of pricing aligns directly with customer objectives and assists them in achieving their goals. In this research, we assess which type of precommitment-based pricing is best suited to pay off for marketers and customers alike. We study whether refunds for high use (prepaid) or premium payments for low use (postpaid) are more effective and find empirically that these different types of payment have a differential impact on service adoption, goal attainment, and retention. Five empirical studies in three service domains demonstrate that prepaid contracts attract more customers, but postpaid contracts increase goal achievement and, thus, loyalty. We test boundary conditions and discuss practical implications on how to implement precommitment-based pricing.

Renewal of Crop Index-Based Insurance Uptake: Evidence from Senegal

In this work, we estimate the determinants of the renewal of weather index-based insurance contracts by Senegalese farmers who practiced rain-fed agriculture in the Senegalese groundnut during the years 2014, 2015 and 2016. Based on data on 3698 producers to whom weather index-based insurance bundled with an agricultural loan was proposed, we conducted a survival analysis using an Andersen-Gill cox regression to identify the drivers of the contract renewal. Our results show that difference in gender and amount of premiums paid do not explain contracts’ renewal. However, cooperatives to whom farmers are affiliated, possibility to delay premium payment until the reimbursement of loans and whether payouts were triggered or not, were the core determinants of renewal after the first year of purchase.

Analisis Empiris Perilaku Lapse pada Nasabah Asuransi Jiwa di Indonesia

Understanding policyholder’s lapse behavior is important in managing insurers’ risk. Recently, numerous studies regarding lapse risk have been conducted in several countries. However, despite the market potential, none has been performed for Indonesia yet. Thus, in this paper, we investigate the determinants of lapse behavior for the Indonesian life insurance industry. Our empirical analysis considers two data sets from Indonesia Financial Service Authority and a private life insurance company using generalized linear model (GLM). In the first data set, we found a supporting evidence for emergency fund hypothesis. However, neither emergency fund hypothesis nor interest rate hypothesis was supported by the second data set. Instead, we found that other factors such as product type, premium payment frequency and policy age could affect policyholder’s lapse behavior more significantly.

Climate Risk Impact on Cross-Border Acquisitions

This article examines impact of climate risks on premium paid in cross-border acquisitions. Results suggest that acquirors from high climate risk geographies tend to offer larger premiums. The results are driven by transactions, in which majority stakes exchange hands, and premium for control is paid to target firm shareholders. There is mild evidence that premiums for control are also higher for targets in low climate risk nations.

Factors of Financial Imbalance in the Compulsory Pension Insurance System: the Case of Russia

The aim of the article is to study the impact of tax and tariff policy on the financial balance of the compulsory pension insurance system in Russia, as well as to substantiate proposals for its financial stabilization. The authors analyzed the consequences of regression applied on wages while forming tariffs for pensions. The methods used in this study were economic, statistical and empirical methods, analysis and synthesis, abstraction, systemic-structural approach. The authors analyzed the influence of preferential tariffs for certain types of economic activity and the use of simplified tax systems for organizations on the income of the Pension Fund of the Russian Federation. The work contains the calculation of income shortfalls in the compulsory pension insurance system resulting from the use of regression and tax benefits when calculating insurance payments to the budget of the Pension Fund of Russia. The authors estimated the financial consequences of the pension valorization in the Soviet period and the pension indexation policy in Russia resulted in the rising costs of the Pension Fund of Russia. The conclusion is that the current procedure for determining insurance contributions to the Pension Fund of the Russian Federation, which provides for a large number of benefits, does not correspond to generally accepted world practice and creates major risks for the financial balance of the pension system. This may cause increasing poverty among seniors. Raising the retirement age did not solve the problem of balancing the pension system, but exacerbated it. The regression in the payment of insurance premiums led to a conundrum in Russia, when an increase in wages resulted in the decrease of the Pension Fund of the Russian Federation’s income. This is associated with the precarization of wages and the desire of business to minimize tax payments. The prospect of further research is to study the conditions for financial stabilization of compulsory pension insurance during the Russian economic crisis. The analysis showed that there is a need to create an independent actuarial center for setting tariffs for deductions to the Pension Fund of the Russian Federation, as well as the redistribution of areas of responsibility between the Pension Fund of the Russian Federation and the Ministry of Finance of Russia.

Citrus Farmers Adoption of Sustainable Agriculture Practices and Its Determinants in the Jordan Valley: The Case of Northern Ghor

The adoption of sustainable agricultural practices is widely recognized as essential to ensure agricultural sustainability. This study analyzed factors influencing citrus farmers adoption of sustainable agricultural practices (SAPs) in the Northern Ghor of Jordan valley. The study used a quantitative approach. Simple random sampling was adopted to select 115 farmers in the study area. The study found that the largest proportion 44.4% of the citrus farmers had a fairly high adoption rate of SAPs while 13.0% of ones had high adoption of SAPs. In addition, the study revealed that age was the significant variable that positively influences farmers SAPs adoption, while experience, primary education, and tertiary education have a negative influence on the adoption of SAPs. The study recommends that special attention be given to older farmers to exploit their skills and receptive to implementing SAPs, encourage and guide farmers toward implementing sustainable agriculture techniques and suitable inputs by providing premium and incentive payments to them, and take deterrent penalties against farmers who using inappropriate and harmful applications, or who do not use appropriate applications.

KLASIFIKASI TINGKAT KELANCARAN NASABAH DALAM MEMBAYAR PREMI DENGAN MENGGUNAKAN METODE K-NEAREST NEIGHBOR DAN ANALISIS DISKRIMINAN FISHER (Studi kasus: Data Nasabah PT. Prudential Life Samarinda Tahun 2019)

Classification is a technique to form a model of data that is already known to its classification group. The model that was formed will be used to classify new objects. The K-Nearest Neighbor (K-NN) algorithm is a method for classifying new objects based on their K nearest neighbor. Fisher discriminant analysis is a multivariate technique for separating objects in different groups to form a discriminant function for allocate new objects in groups. This research has a goal to determine the results of classifying customer premium payment status using the K-NN method and Fisher discriminant analysis and comparing the accuracy of the K-NN method classification and Fisher discriminant analysis on the insurance customer premium payment status. The data used is the insurance customer data of PT. Prudential Life Samarinda in 2019 with current premium payment status or non-current premium payment status and four independent variables are age, duration of premium payment, income and premium payment amount. The results of the comparative measurement of accuracy from the two analyzes show that the K-NN method has a higher level of accuracy than Fisher discriminant analysis for the classification of insurance customers premium payment status. The results of misclassification using the APER (Apparent Error Rate) in K-NN method is 15% while in Fisher discriminant analysis is 30%.

Abstract 16947: Barriers to Care in Urban and Rural Dwelling Patients With Adult Congenital Heart Disease

Introduction: Adult congenital heart disease (ACHD) patients face a unique set of medical, psychological, and social challenges, and access to specialized ACHD care has been shown to improve their outcomes. Rural ACHD patients may represent a uniquely disadvantaged group given their complex health care needs and the distance they must travel to access care. The aim of this study was to investigate the challenges faced by ACHD patients in accessing outpatient cardiac care, with a specific focus on understanding barriers related to distance from care. Methods: This cross-sectional, survey-based study took place in the ACHD clinic at an academic medical center in a metropolitan area. Additional medical information was abstracted in a retrospective manner from the electronic health record. T-tests and Chi-square tests were used to investigate the relationship between variables. Results: A total of 100 patients participated in the study (mean age 40 ± 13 years, 60% female, 18% rural dwelling). The median driving distance to clinic was 20 miles (interquartile range 12 to 77 miles). The most commonly identified barriers to cardiac clinic visits were the financial losses related to taking time off from work (39%), distance of clinic from home (33%), and the weather (33%), whereas finding a ride to clinic, finding childcare, or the time of available clinic appointments were not perceived as significant barriers. As compared to urban dwelling patients, those who were rural dwelling had a lower level of education (p=0.04), more difficulty paying insurance premiums (p<0.001) and copays (p=0.005), and were more likely to identify the distance from clinic (p=0.05) and having to go into the city (p=0.02) as barriers to clinic appointments. Conclusions: Loss of compensation from taking time off work to attend a visit and distance to clinic were the most commonly identified barriers to outpatient cardiac care in this cohort of ACHD patients. These barriers, along with difficulty paying insurance premiums, are more common in rural dwelling patients. Initiatives such as telemedicine visits or providing financial subsidies for travel and treatment could help to expand specialty ACHD care and better serve this growing patient population.

A spatial machine learning model for analysing customers’ lapse behaviour in life insurance

Abstract Spatial analysis ranges from simple univariate descriptive statistics to complex multivariate analyses and is typically used to investigate spatial patterns or to identify spatially linked consumer behaviours in insurance. This paper investigates if the incorporation of publicly available spatially linked demographic census data at population level is useful in modelling customers’ lapse behaviour (i.e. stopping payment of premiums) in life insurance policies, based on data provided by an insurance company in Ireland. From the insurance company’s perspective, identifying and assessing such lapsing risks in advance permit engagement to prevent such incidents, saving money by re-evaluating customer acquisition channels and improving capital reserve calculation and preparation. Incorporating spatial analysis in lapse modelling is expected to improve lapse prediction. Therefore, a hybrid approach to lapse prediction is proposed – spatial clustering using census data is used to reveal the underlying spatial structure of customers of the Irish life insurer, in conjunction with traditional statistical models for lapse prediction based on the company data. The primary contribution of this work is to consider the spatial characteristics of customers for life insurance lapse behaviour, via the integration of reliable government provided census demographics, which has not been considered previously in actuarial literature. Company decision-makers can use the insights gleaned from this analysis to identify customer subsets to target with personalized promotions to reduce lapse rates, and to reduce overall company risk.

Voluntary social insurance for Vietnamese laborers in the informal economic sector

AbstractVoluntary social insurance (VSI), a type of social insurance organized by the Government, allows participants, who work in the informal sector with unstable jobs and income, to choose the premium and payment methods in accordance with their income for their retirement plan. The rate of Vietnamese laborers participating in VSI is low. This study aims to examine the current situation of VSI participation of laborers, as well as their perception of VSI visibility and assessment of VSI policies and utilization. Results from survey with 293 laborers, including 144 VSI participants and 149 VSI non‐participants, and semi‐structured interviews with 60 stakeholders in two districts in Northern Vietnam show the lack of awareness of VSI existence among non‐VSI participants, and limited knowledge of VSI policies among VSI participants. Although participants endorsed beneficiaries and premium in the retirement plan, they were concerned about the long 20‐year premium payment duration in the situation of unstable jobs and income, and the lack of other benefits, for example, maternity leave and unemployment benefit. Results recommend better propagandas, distributed documents, and educational sessions on VSI policies on mass and social media, as well as at VSI conferences and their workplace.

Health Insurance and Determinants of Perceived Healthcare Service Quality in Jordan

This study demonstrates the determinants that affect the perception of quality of healthcare services in Jordan. A cross-sectional study was conducted in order to determine the perception of quality of healthcare services and relating variables including availability of health insurance and quality of health insurance. This study supports the findings of other studies that health insurance influences the perception of quality of healthcare services provided. However, it is also clear that Jordanians consider the availability of doctors, ability to obtain specialist care, accessibility to health services, and cooperation of healthcare workers as significant determinants when conceptualizing the quality of healthcare and its services. The amount of premium paid had a significant association, which could reflect on valuing the money they pay and expecting high-quality care in return. Being insured increases the likelihood of perceiving higher quality of healthcare.

Statistical Method for Assessing the Cost-effectiveness of the Property Insurance Program

The property insurance program developed by the insured determines the main requirements to the conditions, features of the conclusion, execution and termination of the concluded property insurance contracts. When it is implemented for a number of years, when there is a periodic renewal of insurance contracts on standard conditions, the insured has the need to assess the economic effectiveness of such insurance protection, preferably using quantitative indicators. Existing methods of estimating the cost-effectiveness of property insurance programs do not sufficiently take into account the stochastic nature of the insurance process and, in particular, that the resulting losses are subject to extreme type distribution laws studied within the framework of the asymptotic theory of extreme values probabilities. Therefore, for example, it is difficult to adequately assess the economic effectiveness of the property insurance program in a rather frequent situation where the total costs of the insured for paying insurance premiums exceed the total insurance compensation. The proposed statistical method of estimating the economic effectiveness of the property insurance program is based on extreme type distribution functions determined by statistical data, characterizing the claimed losses and insurance compensation paid. The cost effectiveness assessment is carried out using the cost-effectiveness indicator of the property insurance program, which is calculated according to two parameters: the expected share of insurance payments (insurance indemnities) and the premium efficiency coefficient. The expected share of insurance payments is determined by the ratio of mathematical expectations of distribution functions, which characterize the claimed losses and insurance compensation paid. The premium efficiency ratio is the ratio of the gross premium total for the property insurance program, calculated using the function of distributing the claimed losses, and the total amount of premiums paid for the entire period of the property insurance program. Adding up the values of the expected share of insurance payments (insurance indemnities) and the premium efficiency factor taking into account their weights, the value of the economic efficiency indicator of the property insurance program is obtained. The formation of a conclusion on the economic effectiveness of the property insurance program is carried out on the basis of the value of the economic efficiency indicator of the property insurance program according to the proposed scale.

RETRACTED ARTICLE: An empirical study on decision factors affecting fresh e-commerce purchasing geographical indications agricultural products

This article has been retracted from publication in the Taylor & Francis journal, Acta Agriculturae Scandinavica, Section B — Soil & Plant Science. Following publication, concerns were raised by multiple third-parties around the content of the special issue and the decision-making process. Following an investigation by the Taylor & Francis Publishing Ethics & Integrity team in full cooperation with the Editor-in-Chief, it was confirmed that this article included in Special Issue titled “ Envisage Computer Modelling and Statistics for Agriculture”, guest edited by Gunasekaran Manogaran was not peer-reviewed appropriately, in line with the Journal's peer review standards and policy. As the stringency of the peer review process is core to the integrity of the publication process, the Editor and Publisher have decided to retract all of the articles within the above-named Special Issue. The journal has not confirmed if the authors were aware of this compromised peer review process. The journal is committed to correcting the scientific record and will fully cooperate with any institutional investigations into this matter. The authors have been informed of this decision. We have been informed in our decision-making by our policy on publishing ethics and integrity and the COPE guidelines.

‘Growing out of the growing pain’: Financial literacy and life insurance demand in China

Despite China being the third largest life insurance market in the world, only 114 m Chinese people out of a population of 1.4 bn hold life insurance. As a result, insurance companies face serious problems. This scenario has been described as a ‘growing pain’. Might it be due to the low level of financial literacy prevailing in China? Using two unique nationally representative micro datasets, we investigate how financial literacy relates to the demand for life insurance. We find a positive association between various measures of financial literacy and both the probability of holding life insurance and the premium paid. These findings are robust to using different estimation techniques. We conclude that enhancing financial literacy may be an avenue for China to grow out of the ‘growing pain’.

The Annual Premium of Life Insurance on The Joint-Life Status based on The 2011 Indonesian Mortality Table

Life insurance is insurance that protects against risks to someone's life. Joint Life Insurance is insurance where the life and death rules are a combination of two or more factors, such as husband-wife or parent-child, and if the first death occurs, then the premium payment process is stopped. The annual premium is the premium paid annually. In this study, the annual premium is calculated continuously with the equivalence principle based on the 2011 Indonesian Mortality Table. The calculation shows that the amount of annual premiums for 2 (two) and 3 (three) people is not much different. The factors that influence the annual premium amount are the duration insurance period, age at signing the policy, interest rates, life chances, force of mortality, and the number of benefits.

Financial position and performance in IFRS 17

The general principles for determining the financial performance of a company is that revenue is earned as goods are delivered or services provided, and that expenses in the period are made up of the costs associated with this earned revenue. In the insurance industry, premium payments are typically made upfront, and can provide coverage for several years, or be paid many years before the coverage period starts. The associated costs are often not fully known until many years later. Hence, complexity arises both in determining how a premium paid should be earned over time, and in valuing the costs associated with this earned premium. IFRS 17 attempts to align the insurance industry with these general accounting principles. We bring this new accounting standard into the realm of actuarial science, through a mathematical interpretation of the regulatory texts, and by defining the algorithm for profit or loss in accordance with the new standard. Furthermore, we suggest a computationally efficient risk-based method of valuing a portfolio of insurance contracts and an allocation of this value to subportfolios. Finally, we demonstrate the practicability of these methods and the algorithm for profit or loss in a large-scale numerical example.

Особенности исчисления и уплаты обязательных страховых взносов во внебюджетные фонды лицами, осуществляющими предпринимательскую деятельность без привлечения наемного труда

The article deals with the system of mandatory state insurance, types of insurance premiums to non-budgetary funds of the Russian Federation and features of their payment by entrepreneurs who carry out their activities without employing employees in the status of individual entrepreneurs and self-employed. The procedure for calculating and paying mandatory insurance premiums by individual entrepreneurs «for themselves» is analyzed. The expediency and procedure of registration of self-employed persons as insurers in the pension system of the Russian Federation for payment of insurance premiums on a voluntary basis in order to form a future insurance pension is considered.