Journal article

Multivariate Credibility in Bonus-Malus Systems Distinguishing between Different Types of Claims

Emilio Gomez-Deniz, Enrique Calderin-Ojeda

RISKS | MDPI | Published : 2018


In the classical bonus-malus system the premium assigned to each policyholder is based only on the number of claims made without having into account the claims size. Thus, a policyholder who has declared a claim that results in a relatively small loss is penalised to the same extent as one who has declared a more expensive claim. Of course, this is seen unfair by many policyholders. In this paper, we study the factors that affect the number of claims in car insurance by using a trivariate discrete distribution. This approach allows us to discern between three types of claims depending wether the claims are above, between or below certain thresholds. Therefore, this model implements the two f..

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University of Melbourne Researchers


Awarded by Ministerio de Economia y Competitividad, Spain

Awarded by Ministerio de Economia, Industria y Competitividad. Agencia Estatal de Investigacion

Funding Acknowledgements

This work was partially funded by grant ECO2013-47092 (Ministerio de Economia y Competitividad, Spain and ECO2017-85577-P (Ministerio de Economia, Industria y Competitividad. Agencia Estatal de Investigacion)).