Commercial Health Insurance Pricing Method

China insurance regulatory commission enacted a law called the regulations for health insurance in sep.1,2006 .It is the first departmental law to regulate commercial health insurance and will be significative to tackle the new instances and new problems to accelerate the health insurance's specialization that have existed in the commercial health insurance market .It will also promote the innovation in health insurance .In the section of fee administration ,it prescribes a floating rate in short term health insurance .That is to say insurance company should make a equity rate in the scope of floating rate for the insured on the basis of the subject premium according to each inured condition. The gradual open in health insurance rate provides a chance for the insurance company to pricing in accordance with the supply and demand in the insurance market .It is not only reasonable and necessary but also accordant to the fact of china to accelerate the marketing of pricing and introduce the deviated pricing .It is also a key to increase margin.Our country has a broad territory and exist huge difference in areas ,culture and population .Accordingly ,the social health insurance policy often adjust measures to local conditions .By contrary ,our commercial health insurance products practice a flat rate in our whole country ignoring the regional difference .Therefore ,it is necessary to deepen the risk classification for health insurance and make a fair rate to the insured.This paper analysis the assorted pricing method to differ the high and low risk group on the basis of value theory .It demonstrates that the combination of attachment point, excess rate and price can differ the risk of high and low group. The paper also explain the experiment in health insurance of bonus-malus by example simulation .It follows the instance that was researched by two scholars called Xin wang ,Wang Ji qian ,Fang and add furtherly claim amount to the model and demonstrates that the claim amount counts for much for the premium in the next year .Those are innovations in the paper.