Affiliation:
1. Department of General Science, Faculty of Science and Engineering, Kasetsart University Chalermphrakiat Sakon Nakhon Province Campus, Muang, Sakon Nakhon, THAILAND
Abstract
In this paper, we suggest the bare minimum initial capital a firm providing insurance must hold to avoid going bankrupt. A case-separated investment discrete-time surplus process in motor insurance claims serves as the study's model. The 50th, 60th, 70th, and 80th percentiles are used as the dividing line between a claim's standard claim and large claim situations. We also discover a link between an insurance company's initial capital and the likelihood of ruin. The least squares regression method is utilized to calculate the minimum initial capital, and the simulation approach would be used to determine the ruin probability. The results indicate that the least initial capital is better provided by the 70th percentile than the 50th, 60th, and 80th percentiles, respectively.
Publisher
World Scientific and Engineering Academy and Society (WSEAS)
Subject
Economics and Econometrics,Finance,Business and International Management
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