A Suggested Model for Pricing Marine Insurance Products "Applied study on United Company for Private Insurance"

Abstract

This study discusses two methods of marine insurance pricing, which are claim distribution table method (that includes two manners), and the probability distributions method. This study also compares between these two methods by applying to the data of the United Private Insurance Company in Syria during the period (2008-2019).

Two manners have been used to calculate the price according to the loss distribution method. The first manner depends on dividing the actual premiums for the study period on the total sum insured; while , the second  depends on calculating the estimated premium based on the relative frequency of accidents. The first manner has reached a net insurance price that equals (1.99 per thousand), while the second one has reached a price of (..18 per thousand). On the other hand, the net price of marine insurance depending on the exponential probability distribution is (2.279 per thousand). Therefore, the study has suggested using the method of probability distributions in the pricing of general insurance products in the private insurance sector in Syria, which may enable companies to achieve larger premiums. This will be reflected positively on the retention rates, which reduces the volume of insurance premiums transferred to external reinsurers annually.