Insurance Rate Changing: A Fuzzy Logic Approach

JOURNAL OF RISK AND INSURANCE, Vol. 63, No. 3, September 1996

Posted: 26 Sep 1996  

V.R. Young

University of Michigan at Ann Arbor - Department of Mathematics

Abstract

This article describes how fuzzy logic can be used to make insurance pricing decisions that consistently consider supplementary data, including vague or linguistic objectives of the insurer. The theory of fuzzy logic was developed in the 1970s to improve the accuracy and efficiency of expert systems, and through it, one can account for vague notions whose boundaries are not clearly defined. Using group health insurance data from an insurance company, I show how to build and fine-tune fuzzy logic models for changing rates to reflect supplementary data.

JEL Classification: D8, C4, C5, G12, G13

Suggested Citation

Young, V.R., Insurance Rate Changing: A Fuzzy Logic Approach. JOURNAL OF RISK AND INSURANCE, Vol. 63, No. 3, September 1996. Available at SSRN: https://ssrn.com/abstract=3459

Virginia R. Young (Contact Author)

University of Michigan at Ann Arbor - Department of Mathematics ( email )

2074 East Hall
530 Church Street
Ann Arbor, MI 48109-1043
United States
734-764-7227 (Phone)

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