Findings in Risk Management Reported from University Rovira i Virgili (Pricing Life Contingencies Linked to Impaired Life Expectancies Using Intuitionistic Fuzzy Parameters): Insurance – Risk Management

2024 FEB 20 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- New research on risk management is the subject of a new report. According to news originating from Reus, Spain, by NewsRx correspondents, research stated, “Several life contingency agreements are based on the assumption that policyholders have impaired life expectancy attributable to factors, such as lifestyle, social class, or preexisting health issues.”

Funders for this research include Spanish Science And Technology Ministry.

The news correspondents obtained a quote from the research from University Rovira i Virgili: “Quantifying two crucial variables, augmented death probabilities and the discount rate of projected cash flows, is essential for pricing such agreements. Information regarding the correct values of these parameters is subject to vagueness and imprecision, which further intensifies if impairments must be considered. This study proposes modelling mortality and interest rates using a generalization of fuzzy numbers (FNs), known as intuitionistic fuzzy numbers (IFNs). Consequently, this paper extends the literature on life contingency pricing with fuzzy parameters, where uncertainty in variables, such as interest rates and death probabilities, is modelled using FNs. While FNs introduce epistemic uncertainty, the use of IFNs adds bipolarity to the analysis by incorporating both positive and negative information regarding actuarial variables.”

According to the news reporters, the research concluded: “Our analysis focuses on two agreements involving policyholders with impaired life expectancies: determining the annuity payment in a substandard annuity and pricing a life settlement over a whole life insurance policy. In particular, we emphasize modelling interest rates and survival probabilities using triangular intuitionistic fuzzy numbers (TIFNs) owing to their ease of interpretation and implementation.”

For more information on this research see: Pricing Life Contingencies Linked to Impaired Life Expectancies Using Intuitionistic Fuzzy Parameters. Risks, 2024,12(2). (Risks - http://www.mdpi.com/journal/risks). The publisher for Risks is MDPI AG.

A free version of this journal article is available at https://doi.org/10.3390/risks12020029.

Our news editors report that more information may be obtained by contacting Jorge de Andres-Sanchez, Social and Business Research Lab, University Rovira i Virgili, Campus de Bellissens, 43204 Reus, Spain.

ORCID is an identifier for authors and includes bibliographic information. The following is ORCID information for the author of this research: Jorge de Andres-Sanchez (http://orcid.org/0000-0002-7715-779X).

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