Abstract
The purpose of this research is to evaluate the new Japanese Bonus–Malus System (BMS 2012) in automobile insurance, which is an unusual system wherein both no-claim and claimed subclasses exist. To evaluate BMS 2012, we conduct a simulation analysis and compare BMS 2012 with the former Japanese BMS (BMS 2009) in terms of the present value of the total insurance premium that is closely related to the frequency of insurance claims. Based on the comparison, our main conclusion is that BMS 2012 offers more effects to lower the frequency of insurance claims than BMS 2009 does when the policyholders’ classes in BMS are high classes that evaluate as safety drivers, time discount and/or renewal rates are relatively low, and the policyholders’ risk averseness is large.
Acknowledgements
The authors are grateful to the anonymous reviewers. The authors also offer their appreciation to the participants of the IRFRC & APRIA 2018 Joint Conference. This work was supported by JSPS KAKENHI Grant Numbers JP15K03727 (Mahito Okura) and JP26380118 (Motohiro Sakaki).
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Articles in the same Issue
- Featured Articles (Research Paper)
- Estimating China’s Future Life Insurance Market
- Hurricane Bond Price Dependency on Underlying Hurricane Parameters
- A Hybrid Equity Release Plan for Retirement Financing
- Utility-Consistent Valuation Schemes for the Own Risk and Solvency Assessment of Life Insurance Companies
- Featured Article
- An Evaluation of the New Japanese Bonus–Malus System with No-claim and Claimed Subclasses
Articles in the same Issue
- Featured Articles (Research Paper)
- Estimating China’s Future Life Insurance Market
- Hurricane Bond Price Dependency on Underlying Hurricane Parameters
- A Hybrid Equity Release Plan for Retirement Financing
- Utility-Consistent Valuation Schemes for the Own Risk and Solvency Assessment of Life Insurance Companies
- Featured Article
- An Evaluation of the New Japanese Bonus–Malus System with No-claim and Claimed Subclasses