Simulations of Optimizing Strategies for Forming of Mutual Insurance Companies Fund

Nikolay P. TIKHOMIROV, Tatiana M. TIKHOMIROVA, Eldar M. KHAMITOV

Abstract


Mutual insurance companies are subject to high risks of ruin due to lack of funds. Thus, the problem of optimizing strategies for forming the company’s fund are being actualized, ensuring an increase in its financial stability under assumed random insurance payments flow by rationalizing the size of initial and current contributions of its participants, the volume and time parameters of asset securitization, loans taken, insurance risk taxes taking into account the possibility of obtaining subsidies, reinsurance of risks and some other forms of the state support. The criterion in such task is the minimization of probabilities of the company’s ruin. As restrictions costs of policyholders and the state can be considered but those determined by legislation. Because of the random nature of many indicators and the complex relations among them, it is rather difficult to obtain a solution to such optimization problems through analytical methods. For these purposes, simulations are preferred.

Keywords


Mutual insurance, Financial flows, Stability of insurance companies, Optimization, Simulations


DOI
10.12783/dtcse/optim2018/27936

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