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La Soif du Bonus

Published online by Cambridge University Press:  29 August 2014

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In motorcar insurance is widely used a merit rating system characterized by the fact that only the number of claims occurred (and not their amount) modifies the premium. This system induces the insured drivers to support themselves the cost of the cheap claims. We analyze this “hunger for bonus” and solve this decision problem by means of an algorithm related to dynamic programming. The method is then applied to the Belgian bonus system.

Type
Research Article
Copyright
Copyright © International Actuarial Association 1977