Abstract
The introduction of a bonus-malus system linking the premium to the number of reported claims—and not to their amounts—will result in a tendency for policyholders to bear the small claims themselves and not to report them to their company, in order to avoid a premium increase. This phenomenon is called “hunger for bonus” (in French, thirst for bonus). In this chapter we will determine the optimal policy for a policyholder. This decision problem has close links with infinite horizon dynamic programming in a random future.
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© 1985 Springer Science+Business Media New York
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Lemaire, J. (1985). Analysis of the Hunger for Bonus. In: Automobile Insurance. Huebner International Series on Risk, Insurance and Economic Security, vol 4. Springer, Dordrecht. https://doi.org/10.1007/978-94-015-7708-3_18
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DOI: https://doi.org/10.1007/978-94-015-7708-3_18
Publisher Name: Springer, Dordrecht
Print ISBN: 978-90-481-5814-0
Online ISBN: 978-94-015-7708-3
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