摘要：Existing actuarial techniques for automobile warranty ratemaking and
reserving rely heavily on emerging experience (loss development) for the pricing and
unearned premium reserving of these products. Since terms for automobile warranties can
extend up to 10 years, such data is typically not available or not credible to the degree that
the actuary can take great reliance on it. In addition, changing coverage terms in the auto
warranty products can often make past development even less meaningful. Exposure
techniques that have been developed (Cheng, 1993) rely on overall averages for some critical
assumptions instead of dismbutions or individual policy characteristics.
We propose a "miles-driven" approach in which claims are assumed to arise from auto
warranties in proportion to the miles driven times a weight assigned to the overall mileage of
the vehicle. The method we employ is much more complex than traditional methods, but
relies on data that is typically available at waxranty writers. Important data dements would
include the mileage of the vehicle at the time of a claim and if the contract cancels. In
addition, the underlying manufacturer's warranty is also critical.
In order to provide an accurate model of pricing, a distributional approach is utilized for
each policy to model the different driving habits of the policyholders. For example, claim
costs can be developed using 5 different driving habit~ for each policy.
Such a method is very useful for the pricing and premium reserving of new coverages or at
start-up companies.
The method proposed utilizes "policy-event based loss estimation methodology" in which a
predicted claim cost is derived from each warranty individually.
