Pricing Model of Insurance Product for Autistic Persons

Abstract

This paper proposes a pricing model of insurance for persons with autism and further designs a possible insurance product that compensate the insured persons 18 years after purchasing the insurance. Using MATLAB programming, the variation of insurance premium with insurance parameters are plotted to analyze the effect of the insured years, the chance to diagnose a child as autism and the compensation pay-outs for non-autism on the breakeven insurance premium. The analytical results of the pricing model shows that there are a nonlinear relationship between the insurance premium and the insured years, a linear relationship between the insurance premium and the compensation pay-outs, a linear relationship between the insurance premium and the annuity insurance sent back to a non-autism insured, and a linear relationship between the insurance premium and the chance to diagnose a child as autistic. This work also establishes a model to calculate the profit generated from this insurance product.