Bonus-Malus System On Automobile Insurance And Its Application

After more than 100 years development, automobile insurance which came into being at the end of 19th century, has been the most important insurance category in many countries'property insurance. Its main method of ratemaking, which is call Bonus-Malus System.BMS, is already accepted by majority countries and has applied in different designs. Many foreign insurance companies entered into China's insurance market since China entered into WTC and opened the insurance market.With the competition becoming more ruthlessly, how to adopt a rational competitive price has become the main problem that all insurance companies must face.First of all, this paper introduces a general method of designing a BMS of which pricing consists of a prior premium and a posteriori premium. The prior premiumincludes risk rating variable, net premium, security loading and cost loading, and the posteriori premium is designing the optimal BMS.Before designing the Bonus—Malus System, this article has conducted the research first to the nature of the Bonus-Malus System, with the aim of then we can the better design rewards and punishment system. In this chapter, we have studied Markovian of the Bonus-Malus System and have carried on the stable state analysis. Furthermore, the question has carried on the quite thorough inquisition about "the transparency" and "sufficiency" of the Bonus-Malus System, proposed "the sufficiency" and "the transparency" can maintain under the financial balanced premise during the guarantee Bonus-Malus System, new tariff structure corrective method. Then, we have carried on the design to the Bonus-Malus System. According to the car insurance development's new situation, the new characteristic, after specially we consider the liquor, drive to become now society's focal point question now, therefore after liquor, drives this factor to integrate in the car insurance Bonus-Malus System, has designed one take the single policy holder as the foundation, simultaneously considered after the liquor, drives the factor, the claim number of times most superior Bonus-Malus System. In addition, this article regarding has conducted the preliminary research and the design based on the rope compensation's rewards and punishment system.Finally, this article introduces our country implements four Bonus-Malus System in 2006 and 2007, establishes the corresponding Markovian transfer matrix, and carries on the synthesis comparison and the appraisal using each kind of target to these four systems.