Premium Calculation Based on Physical Principles
Amir H. Darooneh
TL;DR
This paper introduces a novel method for calculating insurance premiums using principles from statistical mechanics, deriving the Bühlmann premium as a special case, thus bridging economics and physics.
Contribution
It presents a new approach to premium calculation based on physical principles, expanding the theoretical framework of economic risk assessment.
Findings
Derived a new premium calculation method from physical principles
Connected the method to the Bühlmann premium principle
Provided a theoretical basis linking economics and statistical mechanics
Abstract
We consider the concept of equilibrium in economic systems from statistical mechanics viewpoint. A new method is suggested for computing the premium on this basis. The B\"{u}hlmann economic premium principle is derived as a special case of our method.
Peer Reviews
No public reviews on file for this paper yet. If you reviewed it on a platform where reviews are public (OpenReview, ICLR, NeurIPS, ICML), you can paste yours below so the community can read it here.
Videos
No videos yet. Explain this paper in a talk, walkthrough, or lecture? Add one.
Taxonomy
TopicsComplex Systems and Time Series Analysis · Economic theories and models