Pricing Of Long-term Medical Insurance ——Analysis Of Influencing Factors Based On Random Forest

Coinciding with China’s rapid economic growth,the demand for commercial health insurance in China continues to grow,in the same time,the government encourages insurance companies to increase the supply of health products.However,at present,there is still a certain gap in the commercial health insurance between our country and other developed countries.The gap in long-term medical insurance products,due to the greater potential risks,insurance companies pay less attention to them.So there are few long-term medical insurance products in the market,and further development is still needed.Long-term medical insurance refers to the medical insurance products with an insurance period of more than one year,or insurance with guaranteed renewal clause although the insurance period does not exceed one year.It is different from short-term medical insurance in many aspects,and these differences also bring the risk of developing long-term medical insurance,such as the medical inflation caused by economic development and the emergence of new medical technologies.Pricing is a critical step in the development of insurance and this paper studies the pricing of longterm medical insurance.Firstly,analyzes the influencing factors of its pricing from both qualitative and quantitative aspects.They include age and gender,occupation,economic income,education,health status,region,urban-rural differences and the level of medical institutions.Secondly,analyzes the unique influencing factors of long-term medical insurance pricing,and believes that factors including interest rate,mortality,medical inflation and recurrence rate need to be considered.In quantitative analysis,random forest algorithm is used to analyze the importance of variables based on the CHNS data,and after comprehensive consideration,it is determined that the influencing factors of long-term medical insurance selected in this paper are region and age.Under the rationality assumption of parameters,the paper calculates the medical expense table of long-term medical insurance insured by age and region,and determines the pure premium of long-term medical insurance.Further considering the additional costs,the gross premium of long-term medical insurance is calculated.Then,an example is given to verify the rationality of pricing by comparing with an existing long-term medical insurance product.Finally,based on the results of this paper and foreign experience,the paper putting forward suggestions for the development of longterm medical insurance from the aspects of regulatory and insurance companies,including that the regulatory authorities should update the commercial insurance catalog and standardize the operation of insurance companies,while insurance companies should enhance their underwriting capabilities,and strengthen insurance renewal management.