FIRE CLAIM SIZE ESTIMATION USING MATHEMATICAL METHODS: MONTE CARLO SIMULATION & SCENARIO ANALYSIS

24 Pages Posted: 3 Jul 2024

See all articles by M. Kordjo Senyo Amenyanoo

M. Kordjo Senyo Amenyanoo

University of Leicester - Department of Mathematics; University of Ghana; Institute and Faculty of Actuaries

Date Written: December 09, 2023

Abstract

By building a mathematical model based on the October 2023 updated data tables of the National Fire Statistics—Home Office, this report seeks to, primarily, estimate the total sum—S—likely to be incurred by a UK insurance company next year in paying claims resulting from a fire policy 

These claims, random both in sizeXi–(magnitude) and numberN—(frequency), are estimated using the basic underlying assumptions: that they are independent of each other, and identically distributed from a statistical distribution(s). These distributions, of the number and size of fires arising from policies in the risk pool of the UK insurer, will be predicted from a host of distributions and severally justified as a best fit for the model. Based on the predictions of fire claim distributions, the probability distribution of the total sum likely to be spent by the insurer next year is estimated using Monte-Carlo simulations in R 



Suggested Citation

Amenyanoo, M. Kordjo Senyo, FIRE CLAIM SIZE ESTIMATION USING MATHEMATICAL METHODS: MONTE CARLO SIMULATION & SCENARIO ANALYSIS (December 09, 2023). Available at SSRN: https://ssrn.com/abstract=4879612 or http://dx.doi.org/10.2139/ssrn.4879612

M. Kordjo Senyo Amenyanoo (Contact Author)

University of Leicester - Department of Mathematics ( email )

University Road
Leicester, LE1 7RG
United Kingdom

University of Ghana ( email )

PO Box 25
Legon, Accra LG
Ghana

Institute and Faculty of Actuaries ( email )

India

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