Indian Journal of Science and Technology

Abstract

Point Process is a stochastic model that can explain random natural phenomenon both in space and time. The emergence of claims on insurance companies is an occurrence that is random. The phenomenon is generally approximated by stochastic models. This study aims to estimate the emergence of claim in time interval on casualty insurance company through Point Process approach. For this purpose, the construction of likelihood is done. Furthermore, the hazard rate of the probability of a claim occurrence is estimated by maximum likelihood approach. The result shows that hazard rate is influenced by the ratio between the time intervals from the beginning of the emergence of claims and the number of days in the interval of estimation.
Keywords: Hazard Rate, Insurance claims, Maximum Likelihood, Point Process