Lognormal and log-logistic distribution mixture analysis and application

In this paper, we analyze a mixture of Lognormal and Log-Logistic distribution. We estimate the parameters of the introduced distribution by using the expectation-maximization (EM) algorithm. Various phenomena in the field of medicine and economy could be modeled by this mixture. In this paper, it is used to construct new mortality model for determining the unisex premium rates in life insurance. The application of the model is illustrated in the case of Serbian population and its advantages are presented in the context of life insurance premium calculation.

Penerapan Metode Limited-Fluctuation Credibility dalam Menentukan Premi Murni pada Asuransi Kendaraan Bermotor di PT XYZ

<p><strong>Abstract. </strong>This paper discusses the method of limited-fluctuation credibility, also known as classic credibility. Credibility theory is a technique for predicting future premium rates based on past experience data. Limited fluctuation credibility consists of two credibility, namely full credibility if Z = 1 and partial credibility if Z &lt;1. Full credibility is achieved if the amount of recent data is sufficient for prediction, whereas if the latest data is insufficient then the partial credibility approach is used. Calculations for full and partial credibility standards are used for loss measures such as frequency of claims, size of claims, aggregate losses and net premiums. The data used in this paper is secondary data recorded by the company PT. XYZ in 2014. This data contains data on the frequency of claims and the size of the policyholder's partial loss claims for motor vehicle insurance products category 4 areas 1. Based on the results of the application, the prediction of pure premiums for 2015 cannot be fully based on insurance data for 2014 because the credibility factor value is less than 1. So based on the limited-fluctuation credibility method, the prediction of pure premiums for 2015 must be based on manual values for pure premiums as well as insurance data for 2014. If manual values for pure premium is 2,000,000 rupiah, then the prediction of pure premium for 2015 is 1,849,342 rupiah.</p><p><strong>Keywords</strong><strong>: </strong>limited fluctuation credibility, full credibility, partial credibility and partial loss</p>

THE INFLUENCE OF REINSURANCE RATE, LOAN INTEREST RATE AND BANK'S FEE BASED INCOME AGAINST THE PREMIUM RATE ON CREDIT LIFE INSURANCE (CASE STUDY: CREDIT LIFE INSURANCE’S POLICY HOLDER OF PT INDOSURYA LIFE IN 2018)

This research has purposes to learn further about the impact of reinsurance rates, loan interest and fee-based income towards premium rates on credit life insurance. The unit of analysis was 50 credit life insurance policy holders at PT Indosurya Life throughout 2018. The independent variables that used in this research are reinsurance rates, loan interest and fee based income. While the dependent variable is premium rate on credit life insurance. The sample collected method was taken by saturated sampling. Researchers took the entire population as a sample where the number of samples used were 50 policy holders from credit life insurance which used premium rates and types of effective loan interest for 40 years of age with 5 years of insurance period. The analytical method used was multiple regression analysis and hypothesis test which is done by t-test. And according to the rdata analysis result, loan interest and fee-based income had a positive and significant affect towards credit life insurance's premium rates. Meanwhile, the reinsurance rate variable did not related to credit life insurance's premium rate. It is very recommended to PT Indosurya Life to increase the premium rate on its credit life insurance, so that will increase its Fee Based Income aswell.

THE NEED TO INTEGRATE ZAKAT AND WAKAF IN THE DEVELOPMENT OF MICRO TAKAFUL MODEL

Micro Takaful is an affordable alternative protection policy for those who cannot afford a high-end level protection policy. However, many in the low-income group do not own a personal or family protection policy because they cannot afford the monthly premium rates. Zakat and wakaf could become an alternative source of funds for developing micro takaful. This qualitative study intends to explain the need to integrate zakat funds and wakaf in order to develop micro takaful. Data were collected through semi-structured interviews involving three institutions, namely Syarikat Takaful Malaysia Keluarga Berhad, Muftis Office in the Federal Territories Islamic Religious Council and the Muftis Office in the Selangor Islamic Religious Council. Findings show that there are two major pressing needs for integrating zakat and wakaf, which are to provide a huge risk savings fund and to support an insufficient zakat fund and wakaf.

Rating of Cash Crop Insurance Contracts in Tanzania Using Nonparametric Methods

This chapter used nonparametric methods to establish the parameters of cash crop insurance contracts based on zone yields. The secondary historical yields data obtained from the Food and Agriculture Organization of the United Nations, for the period of 1961 through 2018, for cotton and cashew nuts, were used both in estimating the kernel density function and forecasting the mean yield. The estimated kernel density and mean forecasts were used to tabulate, at a different level of coverage, the probability of loss, the expected yield shortfall (kilogram per hectare, denote kg/ha), and the actuarial-fair premium rates for each crop. The results showed that, at different levels of coverage (i.e., from 50% to 90%), the actuarial-fair premium rates range between 0% and 32% of the sum assured. However, the range for cashew nuts is narrow (0% to 8%) while that of cotton is 4% to 32%, a very wider range compared to cashew nuts. Further, the expected losses for cotton, in the same coverage intervals, ranges from 11.58kg/ha to 256.06kg/ha while that of cashew was 0.44kg/ha to 19.69kg/ha.

A Comparative Study on Different Types of Premiums in Life Insurance Policies

An insurance system is a mechanism for reducing the adverse financial impact of random events that prevents the fulfillment of reasonable expectations, i.e. Insurance is designed to protect against serious financial reversals that may result from random events intruding on the plans of individuals. The Life Insurance Company calculates the policy price with the intent to recover claims to be paid and administrative costs and to make a profit. The cost of insurance is determined using the Mortality Table calculated by Actuaries. The insurance companies receive premiums from the policy owner and invest them to create a pool of money from which to pay claims and finance the insurance company’s operations. Rates charged for life insurance increase with the insured’s age because statistically people are more likely to die as they get older. In this paper, we have discussed different types of insurance policies including expenses and its impacts on lives. We also discussed the annual premium rates of endowment plans, three-payment plans and six-payment plans. Matlab programming is used to calculate the premium rates.

Basket Credit Derivative Pricing in a Markov Chain Model with Interacting Intensities

In this paper, we propose a Markov chain model to price basket credit default swap (BCDS) and basket credit-linked note (BCLN) with counterparty and contagion risks. Suppose that the default intensity processes of reference entities and the counterparty are driven by a common external shock as well as defaults of other names in the contracts. The stochastic intensity of the external shock is a Cox process with jumps. We derive recursive formulas for the joint distribution of default times and obtain closed-form premium rates for BCDS and BCLN. Numerical experiments are performed to show how the correlated default risks may affect the premium rates.