Fuzzy Pricing Of Life Insurance Products

Product pricing is one of most important problems in life insurance actuarial science, which has great impact on the survival and development of insurance company. Interest rate is the core variable in product pricing, and its assumption has strong uncertainty because of the long term of life insurance products. So fuzzy mathematics was introduced into life insurance product pricing as a new method. Current researches mainly focus on the issue of net premium calculation under the condition of fuzzy interest rate. However, operation of insurance companies is bound to bring expenses in practice, so it needs us to take the expenses into account. This paper focuses on the issue of gross premium calculation considering the expense factor, and makes an improvement on the existing pricing method. We develop the fuzzy pricing model which includes expenses, and give appropriateα-principle, then solve the model to get the optimal premium. This method fully considered the uncertain risks of interest rate, and increased the reliability of pricing. On this basis, we further analyze the reserve calculation. In the end, we provide a specific example for life insurance product pricing and do some discussion for improvement.Although fuzzy mathematics has been widely applied in various fields, there are less relative systematical research in life insurance actuarial science. This paper did some helpful jobs in this field.