摘要：This paper examines the current No-Claim Discount (NCD) system used in Ghana’sauto insurance market as inefficient and outmoded and, therefore, proposes an alternative optimalBonus-Malus System (BMS) intended to meet the present market conditions and demand. It appearsthat the existing BMS fails to acknowledge the frequency and severity of policyholders’ claims in itsdesign. We minimized the auto insurance portfolios’ risk through Bayesian estimation and foundthat the risk is well fitted by gamma, with the claim distribution modeled by the negative binomiallaw with the expected number of claims (a priori) as 14%. The models presented in this paperrecognize the longevity of accident-free driving and fully reward higher discounts to policyholdersfrom the second year when the true characteristics of the hidden risks posed to the pool have beenascertained. The BMS finally constructed using the net premium principle is very optimal and hasreasonable punishment and rewards for both good and bad drivers, which could also be useful inother developing economies.
关键词：bonus-malus system; Ghana; Bayesian estimation; negative binomial distribution; auto insurance; Markovian process
