An experience based premium rate discounts system in crop insurance using tweedie’s regressions

• Jose Luis Vilar Zanón ^[1] ; Antonio Heras ^[1]
  1. [1] Universidad Complutense de Madrid

     Universidad Complutense de Madrid

     Madrid, España

     
• Localización: Contributions to risk analysis: risk 2018 / coord. por José María Sarabia Alegría, Faustino Prieto Mendoza, Montserrat Guillén Estany, 2018, ISBN 978-84-9844-683-8, pág. 299
• Idioma: inglés
• Texto completo no disponible (Saber más ...)
• Resumen

  • We develop an experience based premium rate discount system in crop insurance able to cope with adverse years when high losses happen within some return period. Technically, it consists of the application of Tweedie’s model and regressions embedded in a mean discount model. We also develop our system using censored regression (Tobit model) and compare results. The proposed rating system should be able to cope with those years that destabilize the technical result caused by chronic premiums insufficiency. We use data taken from the Spanish “table grape” line of business to exemplify the methodology.