Summary |
Life insurance is subject to a universal rating approach, the situation is completely different in third party liability automobile insurance. Each country has selected its own classification criteria; where it is permitted show large differences in premium rates between companies in the same country. To give a general survey of the various approaches, authors thought that it would be useful to authors present, in part I, the systems of premium rating adopted in several countries.
Part II deals with a priori classification criteria, part III is devoted to a posteriori rating, called bonus-malus or experience rating according to the country. Authors introduce a probabilistic model, based on game theory and Bayesian analysis, which allows us to build up a fair bonus-malus system. This system is established for various premium calculation principles, and it is compared with the system in force in Belgium now. The model is generalized in order to take into account not only the number of claims but also their severity.
Part IV, the final part, deals with the important problem of reserving Authors describe the main global methods of calculating provisions and apply them to a Belgian example.
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