Track: Optimization

Abstract

Earthquake is an unpredictable disaster. It made a lot of damage and loss. Other than that, Indonesia is surrounded by 3 world tectonic plates which makes it more likely to happen. Therefore we have to be preventive. One of solution that can be applied is to insure our assets to the insurance company as earthquake insurance. However insurance company has to calculate premium amount which has to be paid by the clients. The aim of this research is to calculate the amount of premium using estimated loss of previous earthquake. This research uses Bayesian method to estimate the loss amount which then used to calculate the premium. The result of this research is premium which is calculated using 2 principles, expected value principle and standard deviation principle. Premium that is calculated using expected value principle is lower than standard deviation principle. However, the result is not absolute since there is still so many factors that are not included or other premium principles.