Research on Insurance Company Underwriting Decisions based on Breakeven Analysis Multi-Objective Planning Model
DOI:
https://doi.org/10.62051/htt4tg78Keywords:
Insurance Company, Underwriting Decisions, Breakeven Analysis, Multi-Objective Planning, NSGA-II.Abstract
Extreme weather events are increasingly becoming a crisis for insurance companies, posing significant challenges to their financial stability. These events lead to higher claim frequencies and magnitudes, demanding more robust risk assessment and management strategies. This paper constructs a multi-objective programming model based on breakeven analysis, determines the regional risk level through risk assessment, and calculates the breakeven point. When the number of insurance policies exceeds the breakeven point, the insurance company will underwrite the region. The underwriting plan is the Pareto optimal solution, and the insurance company can choose the plan with a large number of insured but low profit, or choose the plan with a high insurance profit but low quantity. This model aims to provide underwriting decision-making guidance for insurance companies, ensuring their long-term healthy operation.
Downloads
References
[1] An Insurance Risk Framework for Climate Adaptation [EB]//BCG Global. (2023-11-29) [2024-06-03]. https://www.bcg.com/publications/2023/an-insurance-risk-framework-for-climate-adaptation.
[2] Hurricanes, cold waves, tornadoes: Weather disasters in USA dominate natural disaster losses in 2021 | Munich Re [EB]. [2024-06-03]. https://www.munichre.com/en/company/media-relations/media-information-and-corporate-news/media-information/2022/natural-disaster-losses-2021.html.
[3] Nature-based solutions for flood risk reduction: A probabilistic modeling framework[J]. One Earth, 2021, 4(9): 1310-1321.
[4] LIU Siting, YANG Ye, GAO Qi, CAO Chunli. Estimate of Net Premium Rate of Cherry Low-Temperature Freezing Disaster Weather Index Insurance in Shijiazhuang[J]. Meteorological Science and Technology, 2023, 51(2): 302-308.
[5] Chen Xiaofeng, Huang Lu. Impact of climate change on the insurance industry: coping strategies of insurance companies and regulators[J]. South China Finance, 2010, 0(5): 55-58.
[6] HUDSON P, DE RUIG L T, DE RUITER M C, et al. An assessment of best practices of extreme weather insurance and directions for a more resilient society[J]. Environmental Hazards, 2020, 19(3): 301-321.
[7] DOHERTY E, MELLETT S, NORTON D, et al. A discrete choice experiment exploring farmer preferences for insurance against extreme weather events[J]. Journal of Environmental Management, 2021, 290: 112607.
[8] GUPTA A, VENKATARAMAN S. Insurance and climate change[J]. Current Opinion in Environmental Sustainability, 2024, 67: 101412.
[9] Home | FEMA.gov [EB]. [2024-06-03]. https://www.fema.gov/home.
[10] Statista - The Statistics Portal for Market Data, Market Research and Market Studies [EB]. [2024-06-03]. https://www.statista.com/.
[11] HANSEN J, SATO M, RUEDY R, et al. Global temperature change[J]. Proceedings of the National Academy of Sciences, 2006, 103(39): 14288-14293.
[12] NEIL ADGER W. Social Vulnerability to Climate Change and Extremes in Coastal Vietnam[J]. World Development, 1999, 27(2): 249-269.
[13] SALA O E, STUART CHAPIN F, III, et al. Global Biodiversity Scenarios for the Year 2100[J]. Science, 2000, 287(5459): 1770-1774.
Downloads
Published
Conference Proceedings Volume
Section
License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
How to Cite
