The Modelling of Auto Insurance Claim-Frequency Counts by the Inverse Trinomial Distribution
In the transportation services industry, the proper assessment of insurance claim count distribution is an important step to determine insurance premiums based on policyholders’ risk profiles. Risk factors are identified through regression analysis. In this paper, the inverse trinomial distribution is proposed as a count data model for insurance claims characterised by having long tails and a high index of dispersion. Two regression models are developed to identify associated risk factors. Other popular models, such as the negative binomial and COM-Poisson, are fitted and compared to information criteria. The risk profiles of policyholders are determined based on the selected model. To illustrate the application of the inverse trinomial regression models, the ausprivautolong dataset of automobile claims in Australia has been fitted with identification of risk factors.
Authors
- Shin Zhu Sim (ORCID: https://orcid.org/0009-0000-0387-5329)
- Shuangzhe Liu (ORCID: https://orcid.org/0000-0002-4858-2789)
- S. H. Ong (ORCID: https://orcid.org/0000-0002-4288-7637)
Institutions
- University of Nottingham Malaysia Campus (MY)
- University of Canberra (AU)
- University of Malaya (MY)
- UCSI University (MY)
Publication Details
- Journal
- Journal of risk and financial management
- Published
- 2024-12-27
- DOI
- https://doi.org/10.3390/jrfm18010007
- Citations
- 1
- Primary Topic
- Insurance and Financial Risk Management
- Type
- article
- Field-Weighted Citation Impact
- 1.13