Private long term care insurance: Theoretical approach and results applied to the Spanish case
AbstractThe passing of the Law 39/2006 has given to Spanish insurance companies the chance of offering products that cover the expenses associated to the risk of dependence. However, due to the lack of reliable statistic information about dependent population, it is extremely difficult to evaluate not only the frequency but also the cost. These two items make the pricing process with a big cloud of uncertainty. This paper proposes a methodology for premium calculation taking into account not only the availability of the data but also the current legal framework in Spain. Together to the theoretical approach, premium calculations for two possible versions are included. Finally, it is introduced a simulation model that pretends to evaluate the impact that a portfolio with these kind of contracts would have on the solvency of an insurance company.
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Bibliographic InfoPaper provided by Universidad de Alcalá, Departamento de Economía. in its series Alcamentos with number 0902.
Length: pages 40
Date of creation: 2009
Date of revision:
Find related papers by JEL classification:
- G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
- C39 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Other
- C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
- C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-07-11 (All new papers)
- NEP-EEC-2009-07-11 (European Economics)
- NEP-HEA-2009-07-11 (Health Economics)
- NEP-IAS-2009-07-11 (Insurance Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gregorius, F. K., 1993. "Disability insurance in The Netherlands," Insurance: Mathematics and Economics, Elsevier, vol. 13(2), pages 101-116, November.
- Pitacco, Ermanno, 1995. "Actuarial models for pricing disability benefits: Towards a unifying approach," Insurance: Mathematics and Economics, Elsevier, vol. 16(1), pages 39-62, April.
- Levikson, B. & Mizrahi, G., 1994. "Pricing long term care insurance contracts," Insurance: Mathematics and Economics, Elsevier, vol. 14(1), pages 1-18, April.
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