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http://dx.doi.org/10.5351/KJAS.2009.22.6.1215

Using Generalized Additive Partial Linear Model for Constructing Underwriting System  

Ki, Seung-Do (Department of Statistics, Hankuk University of Foreign Studies, Korea Insurance Research Institute)
Kang, Kee-Hoon (Department of Statistics, Hankuk University of Foreign Studies)
Publication Information
The Korean Journal of Applied Statistics / v.22, no.6, 2009 , pp. 1215-1227 More about this Journal
Abstract
Underwriting refers to the process that the insurance company measures the potential risk of the future clients and decide whether insuring them with current premium. Although the traditional underwriting system used in Korean automobile insurance market is easy to understand, it is not based on a reliable statistical procedure. In this paper, we propose to apply the generalized additive model into construction of underwriting system, which is based on statistical analysis. We use automobile insurance data in Korea and apply our approach to the data. The results from the empirical analysis would be useful even for determining the significance of each variable in calculating automobile insurance premium.
Keywords
Generalized additive model; automobile insurance; link function;
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