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Actuarial Applications of Epidemiological Models

Title:

Actuarial Applications of Epidemiological Models

Feng, Runhuan and Garrido, José (2008) Actuarial Applications of Epidemiological Models. Technical Report. Concordia University. Department of Mathematics & Statistics, Montreal, Quebec.

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Abstract

The risk of a global avian flu or influenza A (H1N1) pandemic, and the emergence of the worldwide SARS epidemic in 2002–03 have led to a revived interest in the study
of infectious diseases. Mathematical models have become important tools in analyzing the transmission dynamics and in measuring the effectiveness of controlling strategies.
Research on infectious diseases in the actuarial literature only goes so far as to set up epidemiological models which better reflect the transmission dynamics. This paper
attempts to build a bridge between epidemiological and actuarial modeling and set up an actuarial model which provides financial arrangements to cover the expenses
resulting from the medical treatments of infectious diseases.
Based on classical epidemiological compartment models, the first part of this paper proposes insurance policies and models to quantify the risk of infection and formulates
financial arrangements, between an insurer and insureds, using actuarial methodology. For practical purposes, the second part employs a variety of numerical methods to
calculate premiums and reserves. The last part illustrates the methods by designing insurance products for two well known epidemics: the Great Plague in England and the SARS epidemic in Hong Kong.

Divisions:Concordia University > Faculty of Arts and Science > Mathematics and Statistics
Item Type:Monograph (Technical Report)
Authors:Feng, Runhuan and Garrido, José
Series Name:Department of Mathematics & Statistics. Technical Report No. 6/08
Corporate Authors:Concordia University. Department of Mathematics & Statistics
Institution:Concordia University
Date:December 2008
Keywords:epidemiological compartment models; SIR model; actuarial mathematics; infectious diseases; health insurance; Runge–Kutta method; ratemaking; reserves.
ID Code:6690
Deposited By:DIANE MICHAUD
Deposited On:02 Jun 2010 12:02
Last Modified:08 Dec 2010 18:19
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