Rectangularisation Issues in Health Economics & Insurance: Measures and Mitigations ()
Affiliation(s)
1Nanobi Data and Analytics Private Ltd., Bangalore, India.
2The Institute of Actuaries of India, Mumbai, India.
3Xi’an Jiaotong-Liverpool University, Suzhou, China.
4Bryant College, Beijing Institute of Technology, Zhuhai, China.
5Faculty of Business, Charisma University, Turks and Caicos, UK.
6Bank of Communications, Suzhou Branch, Suzhou, China.
ABSTRACT
Aim: Actuaries are
financial engineers who construct arrays of risk models combining mathematical
techniques in order to carry out required actuarial calculations, such as
reserve valuation and pricing. The main purpose is to identify some reliable
models which price risk factors embedded in insurance products. Health
insurance products which are very different in nature from life insurance
products must be examined and priced carefully. This paper discusses
predominantly two risks. Excess claims ratio and Rectangularisation risks.
Background: The first author, Dr. S. Jayaprakash was responsible for Enterprise
Risk Management with MetLife India. He was earlier associated with Life
Insurance Corporation of India & Oracle Financial Services. Dr. P. K.
Dinakar, the second author, qualified as Fellow of the Institute of Actuaries
of India, was Chief Actuary of MetLife India Insurance. He was earlier
associated with Life Insurance Corporation of India & Birla Sunlife. The
third author, Dr. Michael Ha, FSA, MAAA, CFA, CPA (Australia), FRM, PRM, LLM,
was Vice President of Strategic Business Initiatives Units at ING Life
Insurance in its Taiwan operation. He started his
actuarial career at MetLife, Canada. Earlier, the first and third authors
worked on a research paper titled “Modeling Policyholder Behavior through
Insurance Resonant Marts for Pricing Options and Guarantees” [1] which was
presented at the 5th World Congress on Engineering and Technology. The seven
authors decided to collaborate on the current research paper for health
insurance design and financing purposes.
Share and Cite:
Jayaprakash, S. , Dinakar, P. , Ha, M. , Jiang, Z. , Siriwan, U. , Li, M. and Okeagu, C. (2016) Rectangularisation Issues in Health Economics & Insurance: Measures and Mitigations.
Journal of Applied Mathematics and Physics,
4, 1327-1335. doi:
10.4236/jamp.2016.47142.
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