Linear Models as Aids in Insurance Decision Making: The Estimation of Automobile Insurance Claims

Publication Type

Journal Article

Publication Date

6-1987

Abstract

Linear models have been successfully used to describe and predict judgement and behavior in a variety of settings. In this study a linear regression model was used to model claim costs for an automobile insurance account portfolio of a major British insurance company. The categorical independent variables of policyholder age, area of residence, group (vehicle type), and no-claim discount (NCD) status were all found to be statistically significant influences on claim costs. It is argued that ex-post analyses of this nature are important to the managerial process of forecasting future claims and pricing insurance, as well as claims reserving decisions based on those forecasts.

Discipline

Business | Insurance | Management Sciences and Quantitative Methods

Research Areas

Strategy and Organisation

Publication

Journal of Business Research

Volume

15

Issue

3

First Page

247

Last Page

256

ISSN

0148-2963

Identifier

10.1016/0148-2963(87)90027-0

Publisher

Elsevier

Additional URL

https://doi.org/10.1016/0148-2963(87)90027-0

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