A Multipe State Model for Pricing and Reserving Private Long Term Care Insurance in Australia
University of Melbourne Author/sLEUNG, EDWARD
AffiliationEconomics and Commerce: Centre for Actuarial Studies
CitationsLeung, Edward (2004) A Multipe State Model for Pricing and Reserving Private Long Term Care Insurance in Australia.
Access StatusOpen Access
We seek to develop a model for pricing LTC insurance contracts in Australia using the disability prevalence rates contained in the 1998 Australian Bureau of Statistics (ABS) Survey of Disability, Ageing and Carers. We perform premium and reserve calculations by applying generalisations of Thiele's differential equation for a multiple state model within a Markov framework. Several sets of results are presented that both capture a varying range of possible scenarios and demonstrate the flexibility of the model.
Keywordslong term care; disability; multiple state model; private insurance; Markov Process; Thiele's Differential Equation
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