dc.description.abstract | Through the premium, insurance cover is made possible . The study purposed to estimate
optimal price of premiums paid to an insurance company to cover for medical expenditure
based on historical expenditure of an organization/company. Speci cally, this was to be
achieved by rst, coming up with a credible risk premium values of institutional claim
experience to be used as an average premium regulator, second, by projecting future
nancial cost of providing medical cover due to rising costs brought about by in ation
and technological advancement, third, modelling group expenditure claim cost using
distribution based techniques to ascertain estimates of cost of expenditure. To derive
credibility premium, Buhlmann credibility and Buhlmann Straub credibility models were
adopted. Five contracts which represent the hospitals were simulated for a ve year period
each with it claim size, weight and ratios. Projections for the credibility premiums is done by
computation of between and within portfolio variances with the view of nding credibility
premiums by linear estimation from the credibility formula. Unbiased estimators for the
mean and variance functions for both the Buhlmann and Buhlmann-Straub procedures are
obtained.Results reveals that Buhlmann Straub procedure yields higher premium amounts
for all the contracts. Credibility factors with the Buhlmann procedure were constant while
Straub credibility premium varied with associated weights. It was discovered from the two
models su ered that outliers who had hamper correctness of mean and variances which
should be addressed. A longer data period is strongly recommended clean of outliers in
further studies. | en_US |