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Document Details : Title: High Deductibles instead of Bonus-Malus Subtitle: Can it Work? Author(s): LEMAIRE, Jean , HONGMIN, Zi Journal: ASTIN Bulletin Volume: 24 Issue: 1 Date: May 1994 Pages: 75-88 DOI: 10.2143/AST.24.1.2005082 Abstract : HOLTAN (1994) suggests to replace traditional bonus-malus systems by a high deductible financed by a short-term loan. Practical consequences of this proposal are investigated here. Simulation is used to evaluate the efficiency of the Taiwanese Bonus-malus system and the variabdity of premiums of an average policyholder. Holtan's high deductible system is analysed under a compound Poisson assumption, wtth truncated exponential claims. It is shown that the introduction of a high deductible would increase the variability of payments and the efficiency of the rating system for most policyholders. |
