Property and Liability Industry joined the accident insurance market in 2001.The past decade has witnessed growing in premium income. At the same time, the loss ratio has raised gradually. From 2005 to 2011, average loss ratio is 45.24% in Property and Liability insurance
industry and 34.31% in Life insurance Industry. Property and Liability insurer’s underwriter must face the getting worsen loss ratio and look for something to do. The purpose of this paper is to examine execute underwriting guideline can reduce the adverse selection or not and
personal features can influence group insurance’s decision-making factors or not. We complied data on group accident insurance from a Property and Liability Company in Taiwan from 2009 to 2010.There are 151,037 samples in personal features and 4,504 samples in
group features, the 2009 data as contrast group and the 2010 data as a experiment group. We use ordered logistic regression to analysis the phenomenon of adverse selection. The estimation results show that adverse selection exists in group accident insurance and execute underwriting guideline can improve the effect of adverse selection. The result of the analysis not only help underwriter to establish a sound underwriting system but also increase more underwriting profit.
Proceedings of the 2013 International Conference in Management Sciences and Decision Making=2013年管理科學與經營決策國際學術研討會論文集