Application of Epidemiological Models in Actuarial Mathematics
نویسندگان
چکیده
The emergence of the worldwide SARS epidemic in 2003 led to a revived interest in the study of infectious diseases. Mathematical models have become important tools in analyzing transmission dynamics and 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. In an effort to build a bridge between epidemiological and actuarial modeling, we analyze possible financial arrangements made against expenses resulted from medical treatments given to insured patients. Based on classical compartment models, the first part of this paper designs insurance policies for susceptible participants facing the risk of infection and formulates the financial obligations of both parties using actuarial methodology. For practical purposes, the second part employs a variety of numerical methods for calculating premiums and reserves. The last part illustrates the methods by designing insurance products for the Great Plague in Eyam and the SARS Epidemic in Hong Kong.
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