Physical Premium Principle: A New Way for Insurance Pricing
<p>The loading parameter, (<span class="html-italic">p</span>/<span class="html-italic">p</span><sub>0</sub>) − 1, versus the contract duration for large <span class="html-italic">β</span> parameter. This figure shows the dependence of the premium on the period of insurance contract. It justifies our experience in trading. The premium of a risk category is not change linearly with the contract duration. The long term contract is more advantageous than some short term contraction. The loading parameter is used to get rid of the monetary unit.</p> "> Figure 2
<p>Dependence of the ln <span class="html-italic">βT</span> on the ruin probability, the initial wealth and the mean claim size. The <span class="html-italic">β</span> parameter for apparently is very small for the wealthier insurer. Such a company may offer the insurance with a low price.</p> "> Figure 3
<p>The loading parameter, (<span class="html-italic">p</span>/<span class="html-italic">p</span><sub>0</sub>) − 1, versus the, <span class="html-italic">βT</span>, parameter. The squares display the results of the canonical ensemble theory and the triangles correspond to the Esscher premium principle. The difference between two curves is the result of the market effects.</p> ">
Abstract
:1 Introduction
2 Economic Systems in Equilibrium
3 The Canonical Ensemble Theory in Economics
4 The Insurance Pricing
5 Conclusion
References
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Darooneh, A.H. Physical Premium Principle: A New Way for Insurance Pricing. Entropy 2005, 7, 97-107. https://doi.org/10.3390/e7010097
Darooneh AH. Physical Premium Principle: A New Way for Insurance Pricing. Entropy. 2005; 7(1):97-107. https://doi.org/10.3390/e7010097
Chicago/Turabian StyleDarooneh, Amir H. 2005. "Physical Premium Principle: A New Way for Insurance Pricing" Entropy 7, no. 1: 97-107. https://doi.org/10.3390/e7010097