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- Title
SOME APPROXIMATIONS USED IN THE RISK PROCESS OF INSURANCE COMPANY.
- Authors
Mircea, Iulian; Covrig, Mihaela; Cechin-Crista, Dan
- Abstract
The article presents an analysis of the approximations used in the risk process of an insurance company. It notes that the risk process and ruin probability influence the insurer strategy and serve as important concerns for an actuary, researchers and the management of the company. It discusses several processes of ruin probability approximations with respect to the parameters of the individual claim distribution, with the load factor of premiums and with the intensity parameters of the number of claims process. Numerical illustrations are provided in the analysis of the model wherein premiums computations are based on the mean value principle. The illustrations show high relative errors which certainly affect the initial capital and ruin probability.
- Subjects
APPROXIMATION theory; RISK management in business; PROBABILITY theory; INSURANCE companies; FINANCIAL institutions; STRATEGIC planning; INSURANCE premiums; INSURANCE rates; INSURANCE claims
- Publication
Economic Computation & Economic Cybernetics Studies & Research, 2009, Vol 43, Issue 2, p1
- ISSN
0424-267X
- Publication type
Article