Application Of Non - Life Insurance Actuarial In Reinsurance

Actuarial science which is from the insurance industry has always been a vital technology of the insurance company, and non life actuarial science is the actuarial technology applied in the non life insurance. Reinsurance is a kind of behavior that the insurance company transfer itself s risk to another insurance company, and it is an essential tool for the insurance company to diversify risks and keep stable operation. Based on probability and statistics thought, by the proportion method, the parallelogram method, Lloyd’s scales and so on, some research on non life insurance actuarial problem of reinsurance has been done in this paper.In the study of determining the pure premium of the excess of loss reinsurance, a little innovation in this thesis is that the ratio of loss and MPL is taken as a random variable, namely the relative loss random variable, and I use it to measure the size of loss. The related data should be converted into the relative value, thus the effect of the unit of measurement is eliminated effectively. Another innovation is that the Censored Pareto distribution is used to fit the relative loss random variable. The Censored Pareto distribution is in accord with the relative loss’s property that the probability that the relative loss equals 1 is positive, meanwhile it shows continuous variation which is the characteristics of relative loss random variable.The content of this paper are arranged as follows:the first chapter is the introduction, which includes six parts such as the background, the research significance and the reference literature. The second chapter introduces reinsurance’s terminology in detail, the types of reinsurance are introduced respectively in three basic kinds of classification standard.The rights and obligation of the Ceding insurer, reinsurer and the insured has been carried on the thorough analysis to.The third chapter introduces the principle and function of financial reinsurance, and it describes in detail the three common ways of financial reinsurance. It introduces the origin and development of catastrophe risk securitization, and it analyses the similarities and differences of catastrophe bonds and common bonds. Traditional reinsurance methods of storm risk and earthquake risk are briefly described, and an example is analysed to show how to use the financial reinsurance to improve financial statements. The fourth chapter explains the calculation method of proportional reinsurance’s retention and the calculation method of non proportional reinsurance’s retention in turn. It has carried on the analysis to the characteristics, the advantages and disadvantages of each reinsurance, and it introduces various practice situation suitable for each reinsurance. The fifth chapter describes the seven steps of proportional reinsurance premium rate making. The excess of loss reinsurance premium rate making is discussed represented for the non proportional reinsurance premium rate making. When the loss distribution is given, the general expression of retention risk’s expectation is deduced. It introduces the method by which the reinsurance pure premium rate gradually converts to the reinsurance total premium rate. Two commonly used methods for drawing unearned premium reserves are introduced, and they are risk distribution method and the ratio method. It introduces the method for drawing the outstanding claim reserve in the different risk business. An example is analysed to show how to calculate the comprehensive ratio when catastrophe losses is contained. Another example is analysed to show how to calculate the pure premium of excess of loss reinsurance by Lloyd’s scales. The sixth chapter introduces the origin, the criterion and the significance of the optimization of reinsurance,and it briefly explains the research method of the mean-variance theory and the research method of the utility theory. An example is analysed to show how to decide the best retention.The seventh chapter introduces some innovations made in this paper, and four conclusions are come up with after my comprehensive analysis.It points out the shortcomings existing in this paper and the areas for improvement, and it reveals the further research direction.