A suitable claim severity model of Comprehensive insurance policy
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Date
April 2016
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Abstract
This study was base on a claim data collected from a recognized motor insurance
companies in Ghana. The data from this non-life insurance company was to
find the appropriate statistical distributions that best fit the claims data. In the
insurance industry two major problems exist; how to get an appropriate model
for a large claim data and how to fit and test the appropriateness of the model
identified to make future decision. In this study, a clear methodology was set up to
deal with the identified problems. Specific distributions were chosen from a group
of family of exponential distribution. The study began with a brief introduction
for the modeling process as practice by Actuaries. The purpose of the study
was to get the best statistical distribution that best fit the claim amount from
the insurance company data and fit the data using Quantile–Quantile plot (Q-Q
plots) for all the tested distributions. The modeling process established one of the
statistical distributions efficiently fitted the claim data. The study went ahead to
test for the goodness of fit test using (AIC) that is Akaike’s Information Criterion
and a graphical presentation was done using the Q-Q plot. Finally the findings
were discussed and conclusions, was made to the work and recommendations were
given to guide for further study on similar or same topic.
Description
A thesis submitted to the Department of Mathematics, Kwame Nkrumah University of Science and Technology in partial fufilment of the requirement for the degree of Msc. Actuarial Science, 2016