Research On The Pricing Of Vehicle Compulsory Traffic Accident Liability Insurance

It has been more than two years since the Regulation of our country's Vehicle Compulsory Traffic Accident Liability Insurance (hereinafter referred to as Compulsory Traffic Insurance) effected on July 1, 2006. The system has given full play to its social management functions, and it has effectively protected people's lives and property, played an enormous role in the promotion of traffic safety and the maintenance of social stability. And more over Humanistic Spirit is embodied in the neutral operation principle of The Compulsory Traffic Insurance.The Compulsory Traffic Insurance Regulation exerts important influence in many aspects. However due to the insufficiency of the Regulation itself, a variety of problems have gradually emerged, and the problem related to insurance rate is the focus of attention. Compulsory Traffic Insurance rate has been questioned. The thesis analyzes the problems in its implementing course. Based on data relating to the performance of Compulsory Traffic Insurance in a city of Shandong province, the thesis studies the profit performance of the city's Compulsory Traffic Insurance business under pre-reform rate plan, and makes the Compulsory Traffic Insurance rate with actuarial pricing method of non-Life insurance. The thesis does a comparative analysis between the new rates it makes and the rate plan after the rate reform.This thesis consists of six parts as following:Part I is the introduction, which mainly deals with the special background and current situation of China's Compulsory Traffic Insurance, the practical significance of this paper, the research of pricing methods of internal and external scholars .this part is a preparation for the further research .Part II expatiates on the development process of Compulsory Traffic Insurance, studies three main issues rising out of the Regulation's implementing course include low ratio of having insurance coverage, increasing the burden on the insured, hard achievement of the regulation of payment in advance. It finally does comparative analysis of Compulsory Traffic Insurance and the Commercial Third Party Liability Insurance in this part.Part III analyzes rationality of Limit of Liability in Compulsory Traffic Insurance, studies the problems in the ratemaking process. Then it summarizes problems relating to the rate structure and insurance rate of Compulsory Traffic Insurance, and proposes suggestions to solve these problems.Part IV summarizes pricing objective of Compulsory Traffic Insurance, makes a study of Utility Theory, Capital Asset Pricing Model and non-life insurance actuarial pricing method.and it comes to the conclusion that the traditional non-life insurance actuarial pricing method is the most suitable pricing method.Part V makes empirical research into pricing of Compulsory Traffic Insurance. Based on data relating to the performance of Compulsory Traffic Insurance in XX City of Shandong province, the thesis studies the profit performance of the city's Compulsory Traffic Insurance business under pre-reform rate plan and concludes that the Compulsory Traffic Insurance business in the city was profitable. Then the thesis uses non-life insurance actuarial pricing method to price Compulsory Traffic Insurance. Theoretically pure premium is considered to be the product of expected claim frequency and expected severity. According to available data,this part use Poisson distribution to fit claim frequency and use exponential distribution to fit claim severity. It uses law of large numbers to estimate security charge and expense loading is estimated according to empirical data of People's Insurance Company of China, and then is obtained. In the end of this part it does a comparative analysis between the gross premiums and the rate plan in effect.Part VII focuses on some policy suggestions on the development of Compulsory Traffic Insurance on the basis of the preceding research.