Estimation of the Insurance Companies Profit in Iran: The Bayesian Rule

Today one of the development indices is the development of the insurance companies among societies more than ever. Therefore, it is highly important to pay attention to the profit status of the insurance companies. To increase their profits, the insurance companies must determine their services tariffs in way that they are attractive for all the individuals especially those who are low risk because the insurance companies will be worse off if the low risk people exit the market; therefore, increase their tariffs. Meanwhile the tariffs increase causes more low risk people exit the market in a way that after a while all the insurance companies customers include people with high risk. This will ultimately lead to the insurance companies bankruptcy. In this research, the insurance companies profit is estimated using the insurance companies information in relation with the car insurance company in the first nine months of the year 2010 and the Bayesian Decision Rule. In addition to the profit calculation according to different conditions, a fair coefficient is also provided for the insurance pay based on gender, automobile price and the automobile level of operation

کلیدواژه ها:

car insurance companies ، The Bayesian Decision Rule ، risk ، Asymmetric information