Life Insurance Valuation under Pandemic Risks: Covid-19

Date

2023-07-06

Author

Yavrum, Cem
Kestel, Sevtap Ayşe

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This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

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The Covid-19 pandemic has changed the world, affecting almost every industry, including the insurance sector. Since health and life products considering epidemic risk will gain prominence in the future, insurance companies need to consider pandemic dynamics on their products to minimize the effect of the epidemic. From a life insurance perspective, traditional actuarial models and mortality tables lack the flexibility to model infectious diseases which are significantly different from natural cases of death. In this study, the implementation of epidemiological models on the valuation of life insurance premiums is considered. Covid-19 cases are utilized to illustrate the efficiency of a modified risk scheme based on an epidemic cause. Subsequently, the reserve of some life insurance products is examined. The expected outcome of the study is to determine how costly the pandemic risk is on life insurance.

URI

https://www.icms.org.uk/events/2023/IME2023
https://hdl.handle.net/11511/107182

Collections

Graduate School of Applied Mathematics, Conference / Seminar