Volume 43, Issue 4, October 2024, Pages 1013–1022
Bounnite Mohamed Yasser1
1 Centre d’Etudes et de Recherches en Management du Capital Humain (CERMACH), SUP’RH SCHOOL OF MANAGEMENT and Artificial Intelligence, Casablanca, Morocco
Original language: English
Copyright © 2024 ISSR Journals. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
The effectiveness of bonus-malus systems is a critical consideration for automobile insurance companies as these systems directly impact their performance. This article investigates the influence of modifications in transition rules between tariff classes and the increase in their number on the efficiency of bonus-malus systems. Stochastic measures, using Markov chain theory and perfect simulation, are employed for this purpose. The Moroccan bonus-malus system is analyzed as a case study, and a new version of the system is proposed for comparison. This analysis provides insights into how insurance companies can optimize their bonus-malus systems while adapting to financial innovations.
Author Keywords: insurance, financial efficiency, Markov chain, exact simulation, steady-state regime.
Bounnite Mohamed Yasser1
1 Centre d’Etudes et de Recherches en Management du Capital Humain (CERMACH), SUP’RH SCHOOL OF MANAGEMENT and Artificial Intelligence, Casablanca, Morocco
Original language: English
Copyright © 2024 ISSR Journals. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Abstract
The effectiveness of bonus-malus systems is a critical consideration for automobile insurance companies as these systems directly impact their performance. This article investigates the influence of modifications in transition rules between tariff classes and the increase in their number on the efficiency of bonus-malus systems. Stochastic measures, using Markov chain theory and perfect simulation, are employed for this purpose. The Moroccan bonus-malus system is analyzed as a case study, and a new version of the system is proposed for comparison. This analysis provides insights into how insurance companies can optimize their bonus-malus systems while adapting to financial innovations.
Author Keywords: insurance, financial efficiency, Markov chain, exact simulation, steady-state regime.
How to Cite this Article
Bounnite Mohamed Yasser, “Optimizing and modeling the Moroccan bonus-malus system using perfect simulation,” International Journal of Innovation and Applied Studies, vol. 43, no. 4, pp. 1013–1022, October 2024.
