A Systems Analysis of Motor Vehicle Claims
8 Pages Posted: 13 Oct 2018
Date Written: March 10, 2018
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: Suggested Citation