Narrow Results

We have developed a model for a life-insurance policy. In this model, the net gain is calculated by computer simulation for a particular type of lifetime distribution function. We observed that the net gain becomes maximum for a particular value of upper age for last premium.

We present an analytical study of an insurance company. We model the company's performance on a statistical basis and evaluate the predicted annual income of the company in terms of insurance parameters namely the premium, the total number of insured, average loss claims etc. We restrict ourselves to a single insurance class the so-called automobile insurance. We show the existence of a crossover premium p_c below which the company is operating at a loss. Above p_c, we also give a detailed statistical analysis of the company's financial status and obtain the predicted profit along with the corresponding risk as well as ruin probability in terms of premium. Furthermore we obtain the optimal premium p_opt which maximizes the company's profit.