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Bonus-malus Systems with Varying Deductibles

Published online by Cambridge University Press:  17 April 2015

Sandra Pitrebois
Affiliation:
Secura Belgian Re, Avenue des Nerviens, 9-31 boîte 6, B-1040 Bruxelles, Belgium
Jean-François Walhin
Affiliation:
Secura Belgian Re, Avenue des Nerviens, 9-31 boîte 6, B-1040 Bruxelles, Belgium
Michel Denuit
Affiliation:
Institut des Sciences Actuarielles, Université Catholique de Louvain, Rue des Wallons, 6 B-1348 Louvain-la-Neuve, Belgium
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Abstract

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Bonus-malus systems typically lead to high maluses when claims at fault are reported. Such penalties are often difficult to implement in practice. It is shown in this paper that this drawback may be avoided by combining a posteriori premium corrections with a deductible varying according to the level occupied in the scale.

Type
Workshop
Copyright
Copyright © ASTIN Bulletin 2005

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