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Aviation accident insurance: actuarial modeling, pricing, and demonstrating the long-term risk via simulation
Dalarna University, School of Technology and Business Studies, Statistics.
Dalarna University, School of Technology and Business Studies, Statistics.
2010 (English)Independent thesis Basic level (degree of Bachelor)Student thesis
Abstract [en]

Background: Since the 9.11 air disaster has happened, the degree of concern for aviation accident insurance is higher than before. Having been reformed for several times since 1989, the aviation accident insurance is still dissatisfied with the reality in China. The view that the aviation accident insurance can make huge profits spreads widely. Two obvious defects, huge profits and lack of risk resisting abilities, needs to be solved by the insurers. To understand the problem and propose reasonable strategies, we introduced an actuarial model and did simulations for different scenarios, to see how the premium and risk are connected on the long-term scale. Results: Our simulation results show a monotonic pattern between the yearly premium and the bankruptcy probability for scenarios of 50-200 years periods. Only for the low accident rate of 1/8000000 which is close to the Chinese situation, a yearly premium amount of a single-crash compensation can control the bankruptcy probability to about 5%. Conclusions: The accident rate of the insured airlines needs to be controlled to reduce risk, comprehensive reserve system and reinsurance might also need to be set up.

Place, publisher, year, edition, pages
Borlänge, 2010. , 15 p.
Keyword [en]
aviation accident insurance, long-term risk, simulation, actuarial model, premium, reserve.
Identifiers
URN: urn:nbn:se:du-5234OAI: oai:dalea.du.se:5234DiVA: diva2:518998
Uppsok
Social and Behavioural Science, Law
Supervisors
Available from: 2011-01-25 Created: 2011-01-25 Last updated: 2012-04-24Bibliographically approved

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CiteExportLink to record
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Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • chicago-author-date
  • chicago-note-bibliography
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf