A Systems Analysis of Motor Vehicle Claims

8 Pages Posted: 13 Oct 2018

See all articles by John R. Evans

John R. Evans

Centre for Analysis of Complex Financial Systems

Yifei Li

University of Wollongong - Sydney Business School

Date Written: March 10, 2018

Abstract

Insurers operate in a complex economic system where a reductionist analysis of claims to ascertain the key characteristics fails to take into account interdependency of the characteristics which may result in a mispricing of risks and a failure to detect emerging drivers of claims. This paper uses a technique that was developed for complex systems to analyse a large group of motor vehicle claims and concludes that the key characteristics for motor vehicle claims are limited and a lot of the characteristics used for ratings are of secondary value in influencing a claim, and hence of reduced value in the management of a block of motor vehicle insurance policies.

Keywords: Motor Vehicle Insurance, Insurance Ratings, Cladistics Analysis

JEL Classification: G17, G22

Suggested Citation

Evans, John R. and Li, Yifei, A Systems Analysis of Motor Vehicle Claims (March 10, 2018). Available at SSRN: https://ssrn.com/abstract=3252224 or http://dx.doi.org/10.2139/ssrn.3252224

John R. Evans (Contact Author)

Centre for Analysis of Complex Financial Systems ( email )

PO Box 363
Summer Hill, 2130
Australia

Yifei Li

University of Wollongong - Sydney Business School ( email )

1 Macquarie Place
175 Liverpool Street
Circular Quay, NSW 2000
Australia

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