Pricing critical illness insurance using the dash and grimshaw model
No Thumbnail Available
Date
2018-06
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
KNUST
Abstract
Critical Illness Insurance is a new product and its now gaining grounds on the
Ghanaian insurance industry market. This research is aimed at developing a fair
pricing system for a critical illness insurance using the Dash and Grimshaw model
which has embedded multi-state(decrement) model. Due to the uncertainty in the
future and the possibility of an individual being diagnosed of some critical illness,
it is important to cover oneself against this possible adverse financial trauma. This
research considered five critical illnesses thus cancer, heart attack, stroke, kidney
failure and Coronary Artery Bypass Graft. Data on the incidence rates for all
the critical illnesses was used to compute the stand alone rates, acceleration rider
benefit rates and premium rate from ages 20 to 80 inclusive using the Dash and
Grimshaw model. Results from my computations showed that incidence rates
and its corresponding premium rates are directly proportional to one’s age. Also
the difference in stand-alone and accelerated rates was directly proportional to
one’s age.
Description
A thesis submitted to the department of mathematics,
Kwame Nkrumah University of Science and Technology in
Partial fufillment of the requirement for the degree
Of M.phil Actuarial Science