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    Yashvi Patel
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    This document calculates various metrics used to determine insurance premiums. It begins by defining the input data and number of columns and rows. It then calculates the mean claim amount for each policy, the mean and total claim amounts, variance terms, and weighting factors for each policy. It ends by calculating the recommended premiums for each policy using the weighted average of the policy and overall mean claim amounts.

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    This document calculates various metrics used to determine insurance premiums. It begins by defining the input data and number of columns and rows. It then calculates the mean claim amount for each policy, the mean and total claim amounts, variance terms, and weighting factors for each policy. It ends by calculating the recommended premiums for each policy using the weighted average of the policy and overall mean claim amounts.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    16 views2 pages

    Information Technology

    Uploaded by

    Yashvi Patel
    This document calculates various metrics used to determine insurance premiums. It begins by defining the input data and number of columns and rows. It then calculates the mean claim amount for each policy, the mean and total claim amounts, variance terms, and weighting factors for each policy. It ends by calculating the recommended premiums for each policy using the weighted average of the policy and overall mean claim amounts.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    data <- policies_matrix

    volume <- claims_matrix

    #calculating n
    n <- ncol(data)
    Output: 5

    #calculating N
    N <- nrow(data)
    Output: 4

    #calculating Xij
    X <- data/volume
    Output:
    [,1] [,2] [,3] [,4] [,5]

    [1,] 19.19929 20.11532 27.87097 25.60058 30.40268

    [2,] 38.08743 33.36898 31.61290 32.53968 27.08333

    [3,] 22.20859 23.58114 22.37825 22.55401 22.84566

    [4,] 20.90190 11.36701 16.68981 15.80851 17.33967

    #calculating Xibar
    Xibar <- rowSums(data)/rowSums(volume)
    Output: 24.73667 32.48666 22.68814 16.28615

    #calculating Pibar
    Pi <- rowSums(volume)
    Output: 307.6 93.7 617.9 262.8

    #calculating Pbar
    P <- sum(Pi)
    Output: 1282

    #calculating P*
    Pstar <- sum(Pi*(1-Pi/P))/(N*n-1)
    Output: 44.71887

    #calculating E[m(theta)]
    m <- sum(data)/P
    Output: 22.58346

    #calculating E[s^2(theta)]
    s <- mean(rowSums(volume*(X-Xibar)^2)/(n-1))
    Output: 620.7337

    #calculating var[m(theta)]
    v <- (sum(rowSums(volume*(X-m)^2))/(n*N-1)-s)/Pstar
    Output: 22.5759

    #calculating Zi
    Zi <- Pi/(Pi+s/v)
    Output: 0.9179475 0.7731316 0.9573976 0.9052847

    #calculating premiums
    Zi*Xibar+(1-Zi)*m
    Output: 24.55999 30.23994 22.68368 16.88260

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