Modeling health Insurance claim severity in NHIS using parametric probability distribution (A case study of Amansie East Municipal)
No Thumbnail Available
Date
2016-04
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
KNUST
Abstract
General insurance companies face two major problems when they want to use past or present
claim amount in forecasting future claim severity. First they have to find the appropriate
probability distribution for the large volumes of claim amount. Then test how best these
distributions fits the claim data The purpose of this study is to fit a particular distribution suitable
for the National Health Insurance Scheme in the Amansie
East Municipality. Secondary data was collected from Amansie Municipal Insurance Scheme. The
exploratory data analysis technique was used to assist in the identification of the family of
distribution which the data might follow. Akike Information Criterion and KolmogorovSmirnov
used to test the goodness of fit. The diagnostic test probability plot was to used to graphically
demonstrate the goodness of fit the distribution. It was found that the Lognormal distribution
was appropriate distribution for Fee For Service for all categories of service in the district.
However the Burr distribution were considered to be the best distribution for G-DRG in the
District level, CHPS compound, Community clinics, Health centers and CHAG hospital. Also
lognormal distribution was the best for G-DRG modeling for Private, Chemical and Pharmacy
shops and finally the fisk distribution for Public clinics and Maternity. Management at all
municipal and district health insurance schemes should be able to apply the appropriate
statistical distribution used in this research for management policy prescription to improve their
performance.
Description
A thesis submitted to the Department of Mathematics, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirement for the degree of MSc. Actuarial Science