Linear Models as Aids in Insurance Decision Making: The Estimation of Automobile Insurance Claims
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.
Business | Insurance | Management Sciences and Quantitative Methods
Strategy and Organisation
Journal of Business Research
SAMSON, Danny and Thomas, Howard.
Linear Models as Aids in Insurance Decision Making: The Estimation of Automobile Insurance Claims. (1987). Journal of Business Research. 15, (3), 247-256. Research Collection Lee Kong Chian School Of Business.
Available at: http://ink.library.smu.edu.sg/lkcsb_research/3894