Method, computer program product, and system for calculating a premium for stop loss insurance for a fleet of vehicles
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United States of America Patent
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N/A
Issued Date -
Jun 23, 2005
app pub date -
Dec 7, 2004
filing date -
Dec 23, 2003
priority date (Note) -
Abandoned
status (Latency Note)
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Abstract
A premium for stop loss insurance for a fleet of vehicles is calculated as a stop loss premium for an assumed loss distribution having only losses with a value of one of zero and maximum individual loss. The stop loss premium is calculated based on a loss frequency, a maximum individual loss, and a deductible. The loss frequency is calculated by dividing an expected total loss by the maximum individual loss. Subsets of the fleet of vehicles are associated with different treaty durations. For each treaty duration a stop loss premium is calculated for the fleet of vehicles. Subsequently, for each treaty duration a premium is calculated for the subset of the fleet of vehicles associated with the treaty duration by weighting the stop loss premium, calculated for the fleet of vehicles, with the number of vehicles in the subset. Without having to store and process complex distributions of individual losses of the fleet of vehicles, a worst-case premium for stop loss insurance for the fleet of vehicles can be calculated. Repetitive steps used in the prior art for discretizing and processing distributions of individual losses can be eliminated, and thus, processing time and processing power can be reduced.
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