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Premium Rating by Geographic Area Using Spatial Models

Published online by Cambridge University Press:  29 August 2014

M. Boskov  and
R. J. Verrall
M. Boskov*
Affiliation:
Department of Actuarial Science and Statistics, The City University
R. J. Verrall
Affiliation:
Department of Actuarial Science and Statistics, The City University
*
Department of Actuarial Science and Statistics, The City University, Northampton Square, London EC1V 0HB, England.
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Abstract

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This paper gives a method for premium rating by postcode area. The method is based on spatial models in a Bayesian framework and uses the Gibbs sampler for estimation. A summary of the theory of Bayesian spatial methods is given and the data which was analysed by Taylor (1989) is reanalysed. An indication is given of the wide range of models within this class which would be suitable for insurance data. The aim of the paper is to introduce the models and to show how they can be utilised in an insurance setting.

Keywords

Gibbs samplerPostcodesPremium ratingSpatial statistics
Type
Workshop
Information
ASTIN Bulletin: The Journal of the IAA , Volume 24 , Issue 1 , May 1994 , pp. 131 - 143
Copyright
Copyright © International Actuarial Association 1994

References

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