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The impact of the bonus-malus system on the insurance ratemaking in the system of compulsory insurance of the responsibility of transport owners in Russia

Author

Listed:
  • Tsyganov, Aleksander

    (Financial University under the Government of the Russian Federation, Moscow, Russian Federation)

  • Baskakov, Valery

    (International Actuarial Advisory Company, Moscow, Russian Federation)

  • Yazykov, Andrey

    (Financial University under the Government of the Russian Federation, Moscow, Russian Federation)

  • Sheparnev, Nikolay

    (International Actuarial Advisory Company, Moscow, Russian Federation)

  • Yanenko, Evgeny

    (International Actuarial Advisory Company, Moscow, Russian Federation)

  • Grysenkova, Yulia

    (Financial University under the Government of the Russian Federation, Moscow, Russian Federation)

Abstract

The existing system for calculating the bonus-malus coefficient was adopted 15 years ago and has not been tested for many years from the point of view of its mathematical influence on the ratemaking in the system of compulsory motor third party liability insurance. The study showed that the bonus-malus system in force in 2018 is not balanced. In the work, the factors influencing the calculation of the bonus-malus coefficient are investigated, three alternative models for calculating this coefficient are proposed and justified.

Suggested Citation

  • Tsyganov, Aleksander & Baskakov, Valery & Yazykov, Andrey & Sheparnev, Nikolay & Yanenko, Evgeny & Grysenkova, Yulia, 2019. "The impact of the bonus-malus system on the insurance ratemaking in the system of compulsory insurance of the responsibility of transport owners in Russia," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 56, pages 123-141.
    • Handle: RePEc:ris:apltrx:0384
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    References listed on IDEAS

    as
    1. Frees, Edward W. & Shi, Peng & Valdez, Emiliano A., 2009. "Actuarial Applications of a Hierarchical Insurance Claims Model," ASTIN Bulletin, Cambridge University Press, vol. 39(1), pages 165-197, May.
    2. de Jong,Piet & Heller,Gillian Z., 2008. "Generalized Linear Models for Insurance Data," Cambridge Books, Cambridge University Press, number 9780521879149, September.
    3. Natacha Brouhns & Montserrat Guillén & Michel Denuit & Jean Pinquet, 2003. "Bonus‐Malus Scales in Segmented Tariffs With Stochastic Migration Between Segments," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 70(4), pages 577-599, December.
    4. Pavel Cizek & Wolfgang Karl Härdle & Rafal Weron, 2011. "Statistical Tools for Finance and Insurance (2nd edition)," HSC Books, Hugo Steinhaus Center, Wroclaw University of Science and Technology, number hsbook1101, December.
    5. Bermúdez, Lluís & Karlis, Dimitris, 2011. "Bayesian multivariate Poisson models for insurance ratemaking," Insurance: Mathematics and Economics, Elsevier, vol. 48(2), pages 226-236, March.
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    More about this item

    Keywords

    Insurance; motor insurance; insurance rate; bonus-malus; actuarial calculations; generalized linear model;
    All these keywords.

    JEL classification:

    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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