The Study Of Pricing On Critical Illness Insurance From A Insurance Company's View

The implementation of Critical Illness Insurance has reduced the high medical burden for the residents who suffer from "serious illness".Critical Illness Insurance was being promoted in various places since 2002.And our scholars have less research on pricing of Critical Illness Insurance than the institutional level.The government adopts the public bidding method to select a insurance company that will manage Critical Illness Insurance.In this paper,I has summarized the status of the Critical Illness Insurance's management and found that only a small number of 34 qualified insurance companies have involved in the contract of serious illness insurance.At the same time Critical Illness Insurance's fund basically reached the balance of payments.But there has very small profit for the operating insurance company.And some companies have suffered losses.The reasons for the loss include the pricing problem,the low level of overall planning,some insurance institutions lacking of knowledge about Critical Illness Insurance and the method of accounting for the extraction of reserves.Therefore,this article choosing to study the Critical Illness Insurance pricing for the Critical Illness Insurance is also have some guiding significance.It is found that the compensation model has two characteristics: the first one is the multi-level payment level,the more the medical expenses incurred by the insured person,the higher the corresponding compensation level;The second one,the protection of serious illness insurance for the basic medical insurance after the compensation for medical expenses more than serious illness insurance deductible part,so its coverage is concentrated in the distribution of medical losses in the back.In view of the above characteristics,this paper chooses burning cost premium and the method based on the loss distribution model to price the Critical Illness Insurance.Burning cost premium applies the premise that the sample quantity is large,and it is a rough estimation method.It can be applies to areas with a high level of co-ordination.Using the method based on the loss distribution model to pricing the Critical Illness Insurance need a better fit to the distribution of medical.Because of the medical loss distribution show the characteristics of the thick and thick tail at the same time,and the coverage of the Critical Illness Insurance is concentrated on the back of the loss distribution.In this paper,I choose a POT model for a better thick tail fitting and use the Generalized Pareto Distribution to fit sample over threshold value and get a good effect.For the part of the sample before the threshold,at first I use the parametric fitting method is fit distribution of medical loss fitting,but got a bad effect.Then I choose the nuclear density estimation method to determine probability density function of medical loss.Finally,according to the compensation system for serious illness insurance and some certain additional costs to get the Critical Illness Insurance's premiums.