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Bivariate Poisson credibility model and bonus-malus scale for claim and near-claim events

Author

Listed:
  • Simon, Pierre-Alexandre

    (Université Libre de Bruxelles)

  • Trufin, Julien

    (Université Libre de Bruxelles)

  • Denuit, Michel

    (Université catholique de Louvain, LIDAM/ISBA, Belgium)

Abstract

With the emergence of telematics, huge amounts of data have become available to insurers, raising the question of their integration into motor insurance pricing. Guillen (2021) and Sun (2022) introduced the notion of near-claim events, corresponding to dangerous events, which could have triggered a claim. These events typically correspond to harsh deceleration, acceleration or cornering. Based on the motor third-party liability insurance portfolio of an insurance company operating in Belgium, we highlight that deceleration events are the best candidates for characterizing near-claim events. Then, we propose to integrate these events in the pricing structure in addition to policyholder’s claim history with the help of a bivariate Poisson-LogNormal credibility model. Finally, we design an original bonus-malus scale based on both claim and near-claim events.

Suggested Citation

  • Simon, Pierre-Alexandre & Trufin, Julien & Denuit, Michel, 2023. "Bivariate Poisson credibility model and bonus-malus scale for claim and near-claim events," LIDAM Discussion Papers ISBA 2023014, Université catholique de Louvain, Institute of Statistics, Biostatistics and Actuarial Sciences (ISBA).
    • Handle: RePEc:aiz:louvad:2023014
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    References listed on IDEAS

    as
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