Abstract
Financial pricing models are replacing traditional ratemaking techniques for property-liability insurers. This paper provides an introduction to the target total rate of return approach, the capital asset pricing model, the discounted cash flow technique, and the option pricing model, all in an insurance context. Examples of each method, along with discussions of their advantages and weaknesses, are provided.
Volume
LXXXIV
Page
301
Year
1997
Categories
Financial and Statistical Methods
Risk Pricing and Risk Evaluation Models
Systematic Risk Models
CAPM
Actuarial Applications and Methodologies
Ratemaking
Trend and Loss Development
Required Profit
Financial and Statistical Methods
Risk Pricing and Risk Evaluation Models
ROE
Publications
Proceedings of the Casualty Actuarial Society
