For lifelong health insurance covers, medical inflation not incorporated in the level premiums determined at policy issue requires an appropriate increase of these premiums and/or the corresponding reserves during the term of the contract. In this paper, we investigate appropriate premium indexing mechanisms, based on a given medical inflation index. First, we consider a general relation between benefit, premium and reserve increases, which can be used on a yearly basis to restore the actuarial equivalence that is broken due to observed medical inflation over the past year. Next, we consider an individual premium indexing mechanism, depending on the age at policy issue, which makes the relative premium increases above the observed medical inflation more stable over time. Finally, we consider an aggregate premium indexing mechanism for a portfolio of new entrants, where the relative premium increase above the observed inflation is independent of age-at-entry, introducing intergenerational solidarity.

PREMIUM INDEXING IN LIFELONG HEALTH INSURANCE

PITACCO, ERMANNO;
2013-01-01

Abstract

For lifelong health insurance covers, medical inflation not incorporated in the level premiums determined at policy issue requires an appropriate increase of these premiums and/or the corresponding reserves during the term of the contract. In this paper, we investigate appropriate premium indexing mechanisms, based on a given medical inflation index. First, we consider a general relation between benefit, premium and reserve increases, which can be used on a yearly basis to restore the actuarial equivalence that is broken due to observed medical inflation over the past year. Next, we consider an individual premium indexing mechanism, depending on the age at policy issue, which makes the relative premium increases above the observed medical inflation more stable over time. Finally, we consider an aggregate premium indexing mechanism for a portfolio of new entrants, where the relative premium increase above the observed inflation is independent of age-at-entry, introducing intergenerational solidarity.
2013
http://www.pphmj.com/article.php?act=art_view&search=pitacco
File in questo prodotto:
Non ci sono file associati a questo prodotto.
Pubblicazioni consigliate

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11368/2833715
 Avviso

Registrazione in corso di verifica.
La registrazione di questo prodotto non è ancora stata validata in ArTS.

Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus ND
  • ???jsp.display-item.citation.isi??? ND
social impact