Personal Automobile Premiums: An Asset Share Pricing Approach for Property/Casualty Insurance

Asset share pricing models are used extensively in life and health insurance premium determination. In contrast, property/casualty ratemaking procedures consider only a single period of coverage. This is true for both traditional methods, such as loss ratio and pure premium ratemaking, and financial pricing models, such as discounted cash flow or internal rate of return models. This paper provides a full discussion of property/casualty insurance asset share pricing procedures. Keyword: Profit Factor, Rate of Return, LOB - Automobile