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More for Less Insurance Model: An Alternative to (re)Insurance

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Abstract

This paper proposes a new insurance model, called More for Less, as an alternative to (re)insurance. Briefly, the company charges more premiums than necessary from the insured, but it undertakes to reimburse part of them if there has been no claim. Our goal is to compare this model to a (re)insurance model by examining the finite-time ruin probabilities and the expected deficit at ruin. The approach adopted here is based on simple calculations of path integrals and properties of an underlying family of Sheffer polynomials. The main motivation is to offer a different insurance coverage in today’s changing world.

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Acknowledgements

It is a real honor and pleasure for us to contribute to the Special Issue of JSTP in memory of Professor Theophilos N. Cacoullos.

We thank the Editors and Referees for their valuable comments and advice. We also thank Professor S. Utev (University of Leicester) for many helpful discussions.

The work of C. Lefèvre was conducted within the research chair DIALog under the aegis of the Risk Foundation, an initiative of CNP Assurances.

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Authors and Affiliations

  1. Département de Mathématique, Université Libre de Bruxelles, Campus de la Plaine C.P. 210, 1050, Bruxelles, Belgique

    Claude Lefèvre

  2. Department of Mathematics, University of Leicester, Leicester, LE1 7RH, UK

    Muhsin Tamturk

Authors
  1. Claude Lefèvre
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  2. Muhsin Tamturk
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Correspondence to Claude Lefèvre.

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This article is part of the topical collection “Advances in Probability and Statistics: an Issue in Memory of Theophilos Cacoullos” Guest edited by Narayanaswamy Balakrishnan, Charalambos. Charalambides, Tasos Christofides, Markos Koutras, and Simos Meintanis.

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Lefèvre, C., Tamturk, M. More for Less Insurance Model: An Alternative to (re)Insurance. J Stat Theory Pract 16, 64 (2022). https://doi.org/10.1007/s42519-022-00286-4

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