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Setting a Bonus-Malus Scale in the Presence of other Rating Factors

Published online by Cambridge University Press:  29 August 2014

Greg Taylor
Greg Taylor*
Affiliation:
Consultant, Tillinghast-Towers Perrin, GPO Box 3279, Sydney NSW2001, AUSTRALIA Professorial Associate, Centre for Actuarial Studies, Faculty of Economics and Commerce, University of Melbourne, Parkville, Victoria 3052, AUSTRALIA
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Abstract

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The operation of a bonus-malus system, superimposed on a premium system involving a number of other rating variables, is considered. To the extent that good risks are rewarded in their base premiums, through the other rating variables, the size of the bonus they require for equity is reduced. This issue is discussed quantitatively, and a numerical example given.

Keywords

Bonus-malusexperience rating
Type
Workshop
Information
ASTIN Bulletin: The Journal of the IAA , Volume 27 , Issue 2 , November 1997 , pp. 319 - 327
Copyright
Copyright © International Actuarial Association 1997

References

REFERENCES

Lemaire, J. (1985) Automobile insurance: actuarial models. Kluwer – Nijhoff Publishing, Boston.CrossRefGoogle Scholar
Lemaire, J. (1995) Bonus-malus systems in automobile insurance. Kluwer – Academic Publishers, Boston.CrossRefGoogle Scholar