Estimating Indonesian Complete Life Table and Fair Annual Pure Premium Range from Abridged Life Table with Bayesian Method and Bootstrapping

Several Indonesian life insurance companies recently faced financial problems due to inadequate pricing and idealistic investment expectation. Growing market insurtech implementation might lead worse conditions in the future. The current mortality table return assumption are too ideal, so more conservative assumptions required get a reasonable annual pure premium range. This research estimated complete tables from abridged by truncated Heligman-Pollard Makeham model, when lognormal stochastic process return. Parameters for models distribution using Bayesian method with Metropolis-Hasting’s algorithm. Data was bootstrapped insufficient number statistical parametric modeling. Good accuracy rates reached referring Mean Absolute Percentage Error (MAPE) metric both males females, also young ages group (new-born twenty-nine years old) old (thirty eighty-four old). parameters were satisfactory estimate extrapolate calculation until age ninety-nine. A log-normal found fit monthly inflation satisfactorily. Assuming that is close rates, anticipated profitable losing situations. Therefore, can win customers’ decisions without compromising their stability.