How to make an actuarial basis for setting health insurance rates.

There are three methods to determine the rate: observation, classification and increase and decrease. Observation method is a method to analyze the risk elements of a single insured object, observe its advantages and disadvantages, estimate the loss probability and directly determine the insurance rate. Classification is to classify risks, calculate the loss probability of each risk in the same category, and determine the insurance rate according to their loss probability. The increase and decrease method, also known as the amendment method, refers to the rate changed for the insured in the same rate category, and the change range is based on the actual loss experience, expected loss experience or both during the insurance period. In different countries and regions, due to the different technical basis and level of non-life insurance actuarial, the completeness of statistical data is different and the methods adopted are different.

Basic principles for determining insurance rates:

When determining the premium rate, the insurer shall implement the principle of equality of rights and obligations. Specifically, the basic principles for determining the insurance premium rate are sufficiency, fairness, reasonableness, stability and flexibility, and the principle of promoting loss prevention.

1, sufficiency principle

It means that the insurance premium collected is enough to pay the company's insurance premium, reasonable operating expenses, taxes and expected profits. The core of the principle of adequacy is to ensure that the insurer has sufficient solvency.

2, the principle of fairness

On the one hand, premium income must be symmetrical with expected payment; On the other hand, the premium borne by the insured should be consistent with the insurance rights it has obtained, and the premium amount should be symmetrical with the insurance type, insurance period, insurance amount, age and gender of the insured. Insured persons with the same risk nature shall bear the same insurance premium rate, while insured persons with different risk nature shall bear different insurance premium rates.

3, the principle of rationality

It means that the insurance premium rate should be as reasonable as possible, and the insurer can't get excess profits because of the high insurance premium rate.

4, the principle of stability and flexibility

Refers to the insurance premium rate should remain stable for a certain period of time to ensure the credibility of the insurance company; At the same time, it should be adjusted with the changes of risk, insurance liability and market demand, which has certain flexibility.

5. Promote the principle of loss prevention.

It means that the formulation of insurance premium rate is conducive to promoting the insured to strengthen disaster prevention and loss prevention, and reducing the premium rate for the insured who has done a good job in disaster prevention; Implement preferential rates for the insured with no damage or less loss; The insured who does not do a good job in disaster prevention and loss prevention will be punished by high rates or renewal and increase of fees.

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Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.