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Bootstrap control charts in monitoring value at risk in insurance
Abstract:

A risk measure is a mapping from the random variables representing the risks to a number. It is estimated using historical data and utilized in making decisions such as allocating capital to each business line or deposit insurance pricing. Once a risk measure is obtained, an efficient monitoring system is required to quickly detect any drifts in the risk measure. This paper investigates the problem of detecting a shift in value at risk as the most widely used risk measure in insurance companies. The probabilistic C control chart and the parametric bootstrap method are employed to establish a risk monitoring scheme in insurance companies. Since the number of claims in a period is a random variable, the proposed method is a variable sample size scheme. Monte Carlo simulations for Weibull, Burr XII, Birnbaum–Saunders and Pareto distributions are carried out to investigate the behavior and performance of the proposed scheme. In addition, a real example from an insurance company is presented to demonstrate the applicability of the proposed method

Keywords: Risk monitoring Control chart Bootstrap Variable sample size Quantile
Author(s): .
Source: Expert Systems with Applications 40 (2013) 6125–6135
Subject: پول و ارز و بانکداری
Category: مقاله مجله
Release Date: 2013
No of Pages: 11
Price(Tomans): 0
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