Implementation of PH-Transforms in Ratemaking

In this article we introduce a relatively new method for deciding contingency provisions in insurance ratemaking by the use of proportional hazard (PH) transforms. This method is easy to understand simple to use, and supported by theoretical properties as well as economic justification. After an introduction of the PH-transform method, we show through examples how it can be used in pricing ambiguous risks, excess-of-loss coverage's, increased limits, and risk portfolios with dependency risk. We also show how a minimum rate-on-line can be achieved. As well, we propose a right-tail index for insurance risks.