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@article{ART002205283},
author={Myung Joon Kim and Sang Jun Lee and Kim Yeong-hwa},
title={Risk Segmentation and Optimal Estimation Using Stopping Rule in Auto Insurance},
journal={Journal of Insurance and Finance},
issn={2384-3209},
year={2017},
volume={28},
number={1},
pages={3-32},
doi={10.23842/jif.2017.28.1.001}

TY - JOUR
AU - Myung Joon Kim
AU - Sang Jun Lee
AU - Kim Yeong-hwa
TI - Risk Segmentation and Optimal Estimation Using Stopping Rule in Auto Insurance
JO - Journal of Insurance and Finance
PY - 2017
VL - 28
IS - 1
PB - Korea Insurance Research Institute
SP - 3
EP - 32
SN - 2384-3209
AB - For the insurance pricing, variable selection which has different risk pattern and grouping for risk estimation should be considered first. Since a variable, such as gender, is an obvious classification measure, it is not appropriate for considering one of grouping criteria. However, an age variable has a wide range and the criteria for its grouping is ambiguous. Considering each age for risk estimation makes a credibility issue due to the number of customer in each cell. Moreover, the age variable has its unique characteristics that is depending on time and the order for the grouping should be reflected. In this research, the most effective way for the age variable grouping is proposed by considering the variable characteristics. More precisely, various grouping methods currently applied and new method 'The Stopping Rule' will be introduced. Using real insurance data, analysis results are given to compare the performance and also be shown that the properness and effectiveness of the proposed grouping method, ‘The Stopping Rule’.
KW - auto insurance;risk grouping;stopping rule;true cost
DO - 10.23842/jif.2017.28.1.001
ER -

Myung Joon Kim, Sang Jun Lee and Kim Yeong-hwa. (2017). Risk Segmentation and Optimal Estimation Using Stopping Rule in Auto Insurance. Journal of Insurance and Finance, 28(1), 3-32.

Myung Joon Kim, Sang Jun Lee and Kim Yeong-hwa. 2017, "Risk Segmentation and Optimal Estimation Using Stopping Rule in Auto Insurance", Journal of Insurance and Finance, vol.28, no.1 pp.3-32. Available from: doi:10.23842/jif.2017.28.1.001

Myung Joon Kim, Sang Jun Lee, Kim Yeong-hwa "Risk Segmentation and Optimal Estimation Using Stopping Rule in Auto Insurance" Journal of Insurance and Finance 28.1 pp.3-32 (2017) : 3.

Myung Joon Kim, Sang Jun Lee, Kim Yeong-hwa. Risk Segmentation and Optimal Estimation Using Stopping Rule in Auto Insurance. 2017; 28(1), 3-32. Available from: doi:10.23842/jif.2017.28.1.001

Myung Joon Kim, Sang Jun Lee and Kim Yeong-hwa. "Risk Segmentation and Optimal Estimation Using Stopping Rule in Auto Insurance" Journal of Insurance and Finance 28, no.1 (2017) : 3-32.doi: 10.23842/jif.2017.28.1.001

Myung Joon Kim; Sang Jun Lee; Kim Yeong-hwa. Risk Segmentation and Optimal Estimation Using Stopping Rule in Auto Insurance. Journal of Insurance and Finance, 28(1), 3-32. doi: 10.23842/jif.2017.28.1.001

Myung Joon Kim; Sang Jun Lee; Kim Yeong-hwa. Risk Segmentation and Optimal Estimation Using Stopping Rule in Auto Insurance. Journal of Insurance and Finance. 2017; 28(1) 3-32. doi: 10.23842/jif.2017.28.1.001

Myung Joon Kim, Sang Jun Lee, Kim Yeong-hwa. Risk Segmentation and Optimal Estimation Using Stopping Rule in Auto Insurance. 2017; 28(1), 3-32. Available from: doi:10.23842/jif.2017.28.1.001

Myung Joon Kim, Sang Jun Lee and Kim Yeong-hwa. "Risk Segmentation and Optimal Estimation Using Stopping Rule in Auto Insurance" Journal of Insurance and Finance 28, no.1 (2017) : 3-32.doi: 10.23842/jif.2017.28.1.001