Private long term care insurance : theoretical approach and results applied to the Spanish case
IdentifiersPermanent link (URI): http://hdl.handle.net/10017/3323
Universidad de Alcalá. Departamento de Estadística, Estructura Económica y Organización Económica Internacional
AffiliationUniversidad de Alcalá. Departamento de Estadística, Estructura Económica y Organización Económica Internacional
Alcamentos, N. 0902
Long term insurance
Description / Notes
This work has been financed by Spanish Ministry of Education and Science and National Plan for Scientific Investigation, Development and Technological Innovation through the project SEJ2005-08070/ECON, and co-financed by FEDER funds.
SEJ2005-08070/ECON (Ministerio de Educación y Ciencia)
The passing of the Law 39/2006 has given to Spanish insurance companies the chance of offering products that cover the expenses associated to the risk of dependence. However, due to the lack of reliable statistic information about dependent population, it is extremely difficult to evaluate not only the frequency but also the cost. These two items make the pricing process with a big cloud of uncertainty. This paper proposes a methodology for premium calculation taking into account not only the availability of the data but also the current legal framework in Spain. Together to the theoretical approach, premium calculations for two possible versions are included. Finally, it is introduced a simulation model that pretends to evaluate the impact that a portfolio with these kind of contracts would have on the solvency of an insurance company.
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