Showing posts from December, 2017

Brief Information about Health Insurance

General Insurance:Broadly, General insurance is divided into 3 Categories i.e. 1.Personal Insurance 2.Liability Insurance 3.Property Insurance Personal Insurance has 2 major aspects i.e. 1.Mediclaim Policies 2.Personal Accident Policies

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Mediclaim Policies: Introduced in India in 1981. They offer Health insurance and can be issued as Individual policies or as a Group Policy.
Health Insurance: ·It is a type of insurance coverage that covers the cost of an insured individual's medical and surgical expenses. Depending on the type of health insurance coverage, either the insured pays costs out-of-pocket and is then reimbursed, or the insurer makes payments directly to the provider. ·A Health Insurance policy reimburses the insured for medical and surgical expenses arising from illness or injury that leads to hospitalization

Inclusions: Following expenses are reimbursed 1.Nursing expenses, Anaesthesia and other specialist doc…

What is the difference between Select Mortality and Ultimate Mortality?

A simple life mortality table classifies people by attained age and assumes each attained age (or possibly age range) is subject to some rate of mortality. Another way of saying this is the mortality depends on only one variable, attained age.

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SELECT MORTALITY: Since most life insurance involves some kind of underwriting or selection process, it may be interesting to look at the mortality based on two variables, age at selection and duration since selection. This produces a two-dimensional table; that table is Select mortality table.

NOTE: ·A select mortality table includes mortality data on individuals who have recently purchased life insurance. These individuals tend to have lower mortality rates than individuals who are already insured, due chiefly to the fact that they have most likely just passed certain medical exams required to obtain insurance.·some period of years after the selection (say…

What is Random Variable?

Random Variable: When there is a probability associated with a variable that makes it Random Variable. So a Random variable can take many different values with different probabilities.
Example: Q.1) No. of Days in a week-: Is this a Random Variable?
A.1)  NO, because no. of days in a week is fixed i.e 7

Q.2) No. of Days in a Month-: Is this a Random  Variable?
A.1)  Yes, because no. of days in a month can be 28,29,30 or 31. So this is Random in nature.

Suppose X is "Something" now it can take value "0" if 3 comes up on a Dice and "1" if even no. comes up on dice.
So we know that probability of getting a 3 on Dice is 1/6 . So probability of getting a value "0" is 1/6 Similarly the probability of getting an Even no. on dice is 1/2. So probability of getting "1" is 1/2.
so we see that when "something is attached with different values along with different probabilities it becomes a Random variable.

Differentiate between Stochastic and Deterministic model ?

Deterministic Model:Here the output of the model is fully determined  by the parameter values and initial conditions. This model assumes that its outcome is certain if input is fixed. No matter how many times one recalculates, one obtains exactly the same result.
Example: Good example is Linear programming. If we want to minimize the cost by selecting the decision how you want to transport the goods from one place to another , then you are dealing with deterministic model for every data.
Stochastic Model:Stochastic models possess some inherent randomness. The same set of parameter values and initial conditions will lead to different outputs. Every time you run the model , you will get the different result.Example: When you roll a die, you will get different results.

Note:  For Building a stochastic model
Create the Sample space — a list of all possible outcomes,
Assign probabilities to sample space elements,
Identify the events of interest,
Calculate the probabilities for the events of i…

Briefly discussion on Indian Insurance market ?

LIFE INSURANCE: First Life insurance company :
The Oriental Life Insurance company established in 1818. This was a British Company. The first Indian Insurance company was Bombay Mutual Life Assurance Society established in 1871.

When Does it Nationalize: 
 Nationalized on January 19, 1956. There were 154 domestic insurers,16 foreign insurers and 75 Provident funds that were taken by central government ; all the 245 insurers and provident funds result into a company named as Life Insurance Corporation of India(LIC) with a capital of Rs.5 crore by Government of India.

Follow us on LinkedIn : Actuary Sense Follow me on LinkedIn: Kamal Sardana GENERAL INSURANCE: First Non life Insurance Company:Triton Insurance Company ltd. was formed in 1850 in Kolkata by British. The first Indian general insurer was Indian  Merchantile Insurance Company formed in 1907.
When Does it Nationalize:
  Nationalized on November 22, 1972. All the 107 Indian and Foreign insurers operating were nationalized and grou…

Difference between Estimate and Estimator ?

Estimator: It is a Random Variable. So its value depends on the outcome of some experiment, and it has a statistical distribution.
Estimate: It's value is Constant. It is the value taken by an estimator, given a particular set of sample data.

Note: One ESTIMATE will never give you multiple ESTIMATORS but one ESTIMATOR will give you multiple ESTIMATES.ESTIMATOR can be a good or bad, but ESTIMATE can never be good or bad.