Page 223 - Contributed Paper Session (CPS) - Volume 1

CPS1283 Kelvin H.C.Y et al.
the Generalized Linear Model computes the corresponding parameters based
on the individual characteristics of these rating factors.

3. Results
Motor
A sample hypothetical output of the Generalized Linear Model is shown
below:
Base Premium: $ 850
Rating Factor 1 – Gender
Male 1.000
Female 0.975
Rating Factor 2 – Age
Below 25 1.250
26yrs – 30yrs 1.150
31yrs – 35yrs 1.125
36yrs – 40yrs 1.000
41yrs – 45yrs 1.005
46yrs – 50yrs 1.010
51yrs – 55yrs 1.005
56yrs – 60yrs 0.995
Above 60yrs 0.988
Rating Factor 3 – Vehicle Make/Model
Toyota 1.000
Honda 1.015
Proton 1.045
Perodua 1.085
Others 0.995
Using the above sample hypothetical output, the computation of Motor
insurance premium for four risk profile examples are shown below:

Individual 1’s risk profile: Male, 40 years old, Honda
Motor insurance premium = $850 x 1.000 x 1.000 x 1.015 = $862.75

Individual 2’s risk profile: Male, 21 years old, Perodua
Motor insurance premium = $850 x 1.000 x 1.250 x 1.085 = $1,152.81

Individual 3’s risk profile: Female, 62 years old, Toyota
Motor insurance premium = $850 x 0.975 x 0.988 x 1.000 = $818.81

Individual 4’s risk profile: Female, 53 years old, Ford
Motor insurance premium = $850 x 0.975 x 1.005 x 0.995 = $828.73

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