Modeling and Performance of Bonus-Malus Systems: Stationarity versus Age-Correction
In a bonus-malus system in car insurance, the bonus class of a customer is updated from one year to the next as a function of the current class and the number of claims in the year (assumed Poisson). Thus the sequence of classes of a customer in consecutive years forms a Markov chain, and most of th...
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| Format: | Article |
| Language: | English |
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MDPI AG
2014-03-01
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| Series: | Risks |
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| Online Access: | http://www.mdpi.com/2227-9091/2/1/49 |