Underwriting strategy in a competitive insurance environment
An insurance market is considered, and it is the aim of the paper to derive properties of optimal pricing strategies for a finite planning horizon. Here, a strategy is optimal if it maximizes the discounted total profit. Under certain assumptions, e.g. price elasticity, different features of optimal strategies are developed. E.g., it is not optimal to follow the market during a period of premium rate depression, and especially loss leaders are not involved in optimal strategies. The paper is followed by three discussion articles. In these, among other things, it is stressed that the problem considered belongs to the fields of control theory or dynamic programming and that a probabilistic setting is desirable.
scientific article; zbMATH DE number 3938390