2nd Asia Pacific International Conference on Industrial Engineering and Operations Management

Underwriting Factor for Determination of Health Insurance Premium Based on Generalized Linear Models (GLMS) Procedure

Riaman Riaman, Sukono Sukono & Abdul Talib Bon
Publisher: IEOM Society International
0 Paper Citations
Track: Facilities Planning and Management

The increasing cost of treatment in hospitals has made many people worry about the financial risks they face. One way to reduce this risk is through a health insurance program. Each customer must bind himself to an insurance company as a risk guarantor by paying money, which is called a premium. The amount of premium must be calculated correctly, so that it does not harm the customer or the insurance company. Therefore, there are several factors that need to be considered in determining the premium, such as age, occupation, medical history, lifestyle, and other factors determined by the company. These factors are called underwriting factors. In this study, Generalized Linear Models were used to determine the claims and the number of claims. Variables that significantly influence of claims are having a history of allergies, having a history of hereditary diseases, class of health facilities, and length of stay. While the variables that have a significant effect on many claims are occupation, smoking, having a history of allergies, and consuming alcohol. These two models are used to calculate the premium price from a customer using the compound model principle.

Published in: 2nd Asia Pacific International Conference on Industrial Engineering and Operations Management, Surakarta, Indonesia

Publisher: IEOM Society International
Date of Conference: September 13-16, 2021

ISBN: 978-1-7923-6129-6
ISSN/E-ISSN: 2169-8767