Application of Game Theory to Some Problems in Automobile Insurance

Borch, Karl H

Refereed Paper/Article
ASTIN Bulletin International Actuarial Association - Brussels, Belgium
1962: 2:2
208-221
http://www.casact.org/library/astin/vol2no2/208.pdf

Abstract

In this paper we shall study the problem of determining "correct" premium rates for sub-groups of an insurance collective. This problem obviously occurs in all branches of insurance. However, it seems at present to be a really burning issue in automobile insurance. We shall show that the problem can be formulated as a conflict between groups which can gain by co-operating, although their interests are opposed. When formulated in this way, the problem evidently can be analyzed and solved by the help of the "Game Theory" of Von Neumann and Morgenstern.

Taxonomy Classifications

• Actuarial Applications and Methodologies > Enterprise Risk Management > Processes > Analyzing/Quantifying Risks
• Actuarial Applications and Methodologies > Ratemaking > Classification Plans
• Business Areas > Automobile > Commercial
• Business Areas > Automobile > Personal
• Actuarial Applications and Methodologies > Data Management and Information > Statistical Plans
• Financial and Statistical Methods > Statistical Models and Methods

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