| Popis: |
This paper describes a computer simulation of insurer financial behavior, based upon a risk-theoretic model previously reported in the Journal. The simulation can be used to study the impact of a great variety of managerial policy combinations-in a great variety of circumstances-upon specified financial results. This discussion is limited to a study of the consequences of complying with the one-to-one solvency rule as opposed to adhering to a .001 ruin criterion. In four of the five cases studied the .001 criterion yields distinctly different consequences for policyowners, shareholders or both. The fifth case permits an indefinitely large premium volume with comparable results for both criteria. More generally, simulation emerges as a potentially useful tool for refining both the theoretic and empirical aspects of scientific study. |
