Quantifying Uncertainty of Insurance Claims Based on Expert Judgments
In Bayesian statistics, prior specification has an important role in determining the quality of posterior estimates. We use expert judgments to quantify uncertain quantities and produce appropriate prior distribution. The aim of this study was to quantify the uncertainty of life insurance claims, es...
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MDPI AG
2025-01-01
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| author | Budhi Handoko Yeny Krista Franty Fajar Indrayatna |
| author_facet | Budhi Handoko Yeny Krista Franty Fajar Indrayatna |
| author_sort | Budhi Handoko |
| collection | DOAJ |
| description | In Bayesian statistics, prior specification has an important role in determining the quality of posterior estimates. We use expert judgments to quantify uncertain quantities and produce appropriate prior distribution. The aim of this study was to quantify the uncertainty of life insurance claims, especially on the policy owner’s age, as it is the main factor determining the insurance premium. A one-day workshop was conducted to elicit expert judgments from those who have experience in accepting claims. Four experts from different insurance companies were involved in the workshop. The elicitation protocol used in this study was The Sheffield Elicitation Framework (SHELF), which produces four different statistical distributions for each expert. A linear pooling method was used to aggregate the distributions to obtain the consensus distribution among experts. The consensus distribution suggested that the majority of policy owners will make a claim at the age of 54 years old. |
| format | Article |
| id | doaj-art-94b0b095b78047b496c85b7ba2a74772 |
| institution | Kabale University |
| issn | 2227-7390 |
| language | English |
| publishDate | 2025-01-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Mathematics |
| spelling | doaj-art-94b0b095b78047b496c85b7ba2a747722025-01-24T13:39:52ZengMDPI AGMathematics2227-73902025-01-0113224510.3390/math13020245Quantifying Uncertainty of Insurance Claims Based on Expert JudgmentsBudhi Handoko0Yeny Krista Franty1Fajar Indrayatna2Department of Statistics, Faculty of Mathematics and Natural Sciences, Universitas Padjadjaran, Sumedang 45363, West Java, IndonesiaDepartment of Statistics, Faculty of Mathematics and Natural Sciences, Universitas Padjadjaran, Sumedang 45363, West Java, IndonesiaDepartment of Statistics, Faculty of Mathematics and Natural Sciences, Universitas Padjadjaran, Sumedang 45363, West Java, IndonesiaIn Bayesian statistics, prior specification has an important role in determining the quality of posterior estimates. We use expert judgments to quantify uncertain quantities and produce appropriate prior distribution. The aim of this study was to quantify the uncertainty of life insurance claims, especially on the policy owner’s age, as it is the main factor determining the insurance premium. A one-day workshop was conducted to elicit expert judgments from those who have experience in accepting claims. Four experts from different insurance companies were involved in the workshop. The elicitation protocol used in this study was The Sheffield Elicitation Framework (SHELF), which produces four different statistical distributions for each expert. A linear pooling method was used to aggregate the distributions to obtain the consensus distribution among experts. The consensus distribution suggested that the majority of policy owners will make a claim at the age of 54 years old.https://www.mdpi.com/2227-7390/13/2/245expert judgmentelicitationstatistical distributionprior distributionlife insurance |
| spellingShingle | Budhi Handoko Yeny Krista Franty Fajar Indrayatna Quantifying Uncertainty of Insurance Claims Based on Expert Judgments Mathematics expert judgment elicitation statistical distribution prior distribution life insurance |
| title | Quantifying Uncertainty of Insurance Claims Based on Expert Judgments |
| title_full | Quantifying Uncertainty of Insurance Claims Based on Expert Judgments |
| title_fullStr | Quantifying Uncertainty of Insurance Claims Based on Expert Judgments |
| title_full_unstemmed | Quantifying Uncertainty of Insurance Claims Based on Expert Judgments |
| title_short | Quantifying Uncertainty of Insurance Claims Based on Expert Judgments |
| title_sort | quantifying uncertainty of insurance claims based on expert judgments |
| topic | expert judgment elicitation statistical distribution prior distribution life insurance |
| url | https://www.mdpi.com/2227-7390/13/2/245 |
| work_keys_str_mv | AT budhihandoko quantifyinguncertaintyofinsuranceclaimsbasedonexpertjudgments AT yenykristafranty quantifyinguncertaintyofinsuranceclaimsbasedonexpertjudgments AT fajarindrayatna quantifyinguncertaintyofinsuranceclaimsbasedonexpertjudgments |