New Expert Systems Findings from Hunan University of Science and Engineering Reported (Optimal Insurance Contract Design With “no-claim Bonus and Coverage Upper Bound” Under Moral Hazard): Expert Systems

2021 OCT 07 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Data detailed on Expert Systems have been presented. According to news originating from Hunan, People’s Republic of China, by NewsRx correspondents, research stated, “In this paper, an optimal insurance problem from the view of a risk-averse individual under moral hazard is considered.”

Funders for this research include Mobile Health Ministry of Education-China Mobile Joint Laboratory Grant, Scientific Research General Project of Education Department of Hunan Province, Natural Science Foundation of Hunan Province.

Our news journalists obtained a quote from the research from the Hunan University of Science and Engineering, “Based on the Principal-Agent theory, we introduce a combined incentive tool of ‘No-claim Bonus and Coverage Upper Bound’ to encourage the insured to make a higher risk-reducing effort and obtain higher expected utility than in a basic contract. We confirm if marginal expected utility brought by the increase of riskreducing effort decreases at the critical point of transition between two contracts, the combined incentive tool can restrain the moral hazard of the insured.”

According to the news editors, the research concluded: “Moreover, Pareto efficiency improvement of the tool is visually displayed by two case examples.”

This research has been peer-reviewed.

For more information on this research see: Optimal Insurance Contract Design With “no-claim Bonus and Coverage Upper Bound” Under Moral Hazard. Expert Systems with Applications, 2021;178. Expert Systems with Applications can be contacted at: Pergamon-elsevier Science Ltd, The Boulevard, Langford Lane, Kidlington, Oxford OX5 1GB, England. (Elsevier - www.elsevier.com; Expert Systems with Applications - http://www.journals.elsevier.com/expert-systems-with-applications/)

The news correspondents report that additional information may be obtained from Yifang Qin, Hunan University of Science and Engineering, Coll Tourism & Cultural Ind, Yongzhou, Hunan, People’s Republic of China. Additional authors for this research include Benjiang Ma, Yechun Zhang and Muhammad Farhan Bashir.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.eswa.2021.115050. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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