Development of an unemployment insurance product
This paper is about the development of unemployment insurance product. This is done by first getting the benefit, which will be valued as an annuity. Also, we will introduce adjustment factors that will in essence reduce the benefit with time. We use the Cox model to get the holding time probabilities of a certain unemployed population. This will help us determine the expected benefits at different time periods. The premiums will be treated as a one-off payment, which we will equate to the benefit. As a result, we are able to determine the amount of benefit that will be required for both males and females of different age groups. This product is tailored for an untapped market and combined with its attractive aspects; promise a huge upside potential to the underwriting company while offering the society a much needed cover for an endemic issue; Unemployment.