Journal of Risk Analysis and Crisis Response

Volume 1, Issue 1, July 2011, Pages 48 - 58

A Discrete Model of the Expected Loss for Catastrophe Insurance in Natural Disasters

Authors
Chongfu Huang, Xing Shi
Corresponding Author
Chongfu Huang
Available Online 1 July 2011.
DOI
https://doi.org/10.2991/jracr.2011.1.1.5How to use a DOI?
Keywords
Typhoon, insurance, actuarial, Fujian, house.
Abstract
The traditional actuarial model of catastrophe insurance is too theoretical. In many cases, it is of no avail. In this paper, we suggest a discrete model of catastrophe insurance to calculate the expected losses. We successfully applied it to calculate the premium rate of the typhoon in Fujian Province, China. In this model, we use the conditional probability distribution of catastrophic events given a lower-catastrophe and the probability distribution of the catastrophe times to express randomness of catastrophe, use the matrix showing the damage ratio of a single insured object and the matrix showing the insurance loss to express the relationship between catastrophe and economic loss, and use the discrete probability distribution and catastrophe losses and above the relationship to calculate the expected loss. When we use the model to calculate the premium rate, we consider adjustment factors and insurance amount, and partly apply the general actuarial model. Research shows that the model versatility, easy operation, the results more reliable.
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Journal
Journal of Risk Analysis and Crisis Response
Volume-Issue
1 - 1
Pages
48 - 58
Publication Date
2011/07
ISSN (Online)
2210-8505
ISSN (Print)
2210-8491
DOI
https://doi.org/10.2991/jracr.2011.1.1.5How to use a DOI?
Open Access
This is an open access article distributed under the CC BY-NC license.

Cite this article

TY  - JOUR
AU  - Chongfu Huang
AU  - Xing Shi
PY  - 2011
DA  - 2011/07
TI  - A Discrete Model of the Expected Loss for Catastrophe Insurance in Natural Disasters
JO  - Journal of Risk Analysis and Crisis Response
SP  - 48
EP  - 58
VL  - 1
IS  - 1
SN  - 2210-8505
UR  - https://doi.org/10.2991/jracr.2011.1.1.5
DO  - https://doi.org/10.2991/jracr.2011.1.1.5
ID  - Huang2011
ER  -