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Monday, December 26, 2011

Simulation Problem

A health insurance product is designed targeting persons working in Education sector. The age profile of people who has taken this policy is as follows:

 

21- 35 years     25%

35+ - 45 years 30%

45+ - 55 years 25%

55+  years       20%

 

Probability of claim is 0.2 in all the age groups however the claim amount varies linearly between Rs. 15000 to Rs. 80000 for age up to 45 years and between Rs. 30000 to Rs. 200000 for age above 45 years. Do a simulation run of length 10 to understand the claim pattern.

 

Use following random numbers 5971, 9987, 1741, 7431, 188, 5333, 3680, 4883, 5036, 5407, 2763, 7194, 3395, 3632, 1109, 9943, 6690, 6408

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