International Journal of Mathematics Trends and Technology
Volume 69 | Issue 12 | Year 2023 | Article Id. IJMTT-V69I12P503 | DOI : https://doi.org/10.14445/22315373/IJMTT-V69I12P503
| Received | Revised | Accepted | Published |
|---|---|---|---|
| 20 Oct 2023 | 28 Nov 2023 | 10 Dec 2023 | 29 Dec 2023 |
Private health insurance plays a crucial role in the financing of healthcare in numerous states. Health insurance
providers offer a diverse range of coverage options to ensure financial protection against unexpected losses caused by accidents
or diseases. An event that prompts the insured to file a claim is known as a claim event. An insurance firm must set aside enough
money to pay current and future claims for active policies to guarantee that all claims are fulfilled. The aim of this paper is to
investigate whether deterministic methods and the bootstrap method can be used effectively to forecast claim reserves for a
health insurance portfolio. The study is divided into two parts, each with its own specific objective. The first part presents and
analyzes two different techniques utilized in estimating loss reserves: the chain ladder method and the Bornhuetter-Ferguson
method. The second part focuses on employing the bootstrap method to generate an approximate predictive distribution for
future random losses. The data utilized in this research paper comprises secondary data acquired from the personal sickness
portfolio of an Albanian insurance company for the period spanning from 2018 to 2022. The reserves calculated using the
Bootstrap method is lower than those computed using CL and BF methods. This conclusion suggests that the insurance company
can consider alternative ways to allocate its funds instead of maintaining a large claim reserve. The prediction of reserves for
all events up to the next 4 periods is accomplished through the use of CL and bootstrap methods.
Bootstrap, Bornhuetter-Ferguson, Chain ladder, Claims, Private Health Insurance.
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Esmeralda BRATI, Alma BRAIMLLARI, "Application of Bootstrap and Deterministic Methods for Reserving Claims in Private Health Insurance," International Journal of Mathematics Trends and Technology (IJMTT), vol. 69, no. 12, pp. 17-26, 2023. Crossref, https://doi.org/10.14445/22315373/IJMTT-V69I12P503
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