| This dissertation consists of two essays on insurance theory. The first essay, Effects of Underwriting Prohibitions on the Labor Market, examines whether the state laws that prohibit the use of gender, age and impairment status as criteria for the purposes of underwriting on group health insurance market affect the outcomes of the labor market. Using Current Population Survey and state statutes we examine whether the underwriting restrictions are related to labor market outcomes. The findings suggest that in states and years when gender based restrictions on underwriting are in effect, females are more likely to work in full-time jobs relative to when underwriting restrictions are not in effect. When disability is prohibited as an underwriting criterion, the able-bodied workers are more likely to be hired by small firms, and they are paid more than small firm workers in states where no underwriting restrictions are in effect. The results also suggest that older individuals are less likely to be unemployed than younger people when age based restrictions are in place.; The second essay, Credibility Using Copulas, introduces copulas to the context of credibility theory, a "corner stone" in actuarial science. In this work, a direct link between credibility and marginal loss distributions is developed through the notion of a copula, a tool for understanding relationships among multivariate outcomes. Copulas are used to model the dependencies over time; specifically, this paper is the first to propose using a t-copula in the context of generalized linear models. Like Bayesian methods, copula credibility prediction methods allow actuaries to provide an entire distribution of predicted claims, not just a point prediction. In the essay, a theoretical framework is presented first, and then an example of Massachusetts automobile claims is employed for the purposes of illustration. A comparison between the new credibility estimates and estimates using methods currently existing in the literature is also included. The comparison results indicate that copula-based credibility provides actuaries with one more tool to calculate premium rates of insurance policies. |
