Thursday, April 15, 2010

Risk Theory

Note : anyone tht wanna buy insurance policy are encouraged to read this entry..

This is a subject for actuary student should be taken. I take this subject 4 this sem n right now, I'm struggling to stdy 4 final exam, this 23rd April. wishing gud luck to my self.hehe

this subject is abt calculate n forecast performance @ stability of insurance company. bt using the theory, especially ruin theory, we can predict whether a company can survive or not in the future by using total premium paid and claim for the current year. 

for early chapter, it's quit difficult to understand coz it seems not very clear for me. but when it near to final chapter, I felt quit easy to understand since it's used to apply in certain situations. now I realize, anything tht I learnt, I like to apply in real life, so tht it's easily to understand. 

by learn this subject, I realize this theory is not only limited to predict the stability of insurance company, but it is useful to predict our financial planning as well. I can see tht it can help us to plan our finance effectively.. 

by using ruin theory, any symptoms of a company tht will be destroyed will be detected early. so tht the company should take actions to recover before it really happened. this theory critically using statistic distributions, formula, and many calculations to get the result. hmm, so tired to memorize all those formulas....

the best thing I got from this learning is most of insurance company have their own TRICKS to make profit!!! most of people out there doesn't know abt it.. let me tell u all abt these.. (jgn ada org insurans bca sudah..=p)

as u all know, there are a lot of terms n conditions in agreement tht u MUST read b4 buying the policy. not just read actually, u all have to deeply understand!! actually there are some kind of policies tht offer a DISCOUNT to renew the policy after the policy had been expired after one year. u all PLEZ don't pretty trust the discount offered. 

the offer is valid if u doesn't make any claims within the period of policy. normally, this situation happened to term insurance such as motor insurance, health ins. n etc. base on the agreement, if u make any claim, u wouldn't get any discount for the next year premium paid. 

secara mudahnya, 4 this year, u paid premium RM200 monthly. if u doesn't got accident n doesn't make any claim 4 the whole year, u will get discount, so tht u just pay less than RM300 for the next year myb juz RM250 if u want to renew the policy. this payment will reduce in several levels. 

by the next years, myb 2 or 3years later, u may pay the premium RM75 monthly coz u didn't make any claims. but, at tht time, suddently u got an accident n u make a claim. next year, your payment automatically reach RM300 @ RM250 per month for once again.. 

as a nutshell, I can see tht by this tricks, policy holders ( pembeli polisi) might think twicely or more b4 making a decision whether wanna make a claim or not.. so, klu kerugian yg kecil2 tu, policy holders are not willing to make any claim la. just paying the premium every year without make even a single claim.. rasa tertipu kn..

so, the best way is, never buy any policy insurance..haha..xdela, u all must think smart la.. as I know, Takaful insurance is not like tht.. they hv their own strategies, they pay dividend 4 those who are not make any claim within a year.. 

another way is, learn risk theory.. there have a formula to decide whether to claim or not when any losses occur.. I'm not mastering enough for tht part right now.. still hv a week to go before I'll apply those kind of things in my exam soon.. hopefully I can mastering this subject by this week..insyaAllah...

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