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In many applications, objective functions, including loss functions as a particular case, are determined by the problem formulation. In other situations, the decision maker’s preference must be elicited and represented by a scalar-valued function (called also utility function) in a form suitable for optimization — the problem that Ragnar Frisch has highlighted in his Nobel Prize lecture. [4]
It is primarily used in the property and casualty [5] [9] and health insurance [2] fields. Generally considered a blend of the chain-ladder and expected claims loss reserving methods, [2] [8] [10] the Bornhuetter–Ferguson method uses both reported or paid losses as well as an a priori expected loss ratio to arrive at an ultimate loss estimate.
Insurance companies themselves, as well as self-insuring employers, purchase stop-loss coverage for a premium to protect themselves. [1] In the case of a participant reaching more than the specific (or "individual") stop-loss deductible ($300,000, for example), the insurer will reimburse the insured (the company, not the participant) for the remainder of the claim to be paid over that ...
Loss minimization: A well-structured enterprise risk management system can identify potential monetary losses early enough to allow a financial institution to mitigate or even avoid them. An ERM ...
The chain-ladder or development [1] method is a prominent [2] [3] actuarial loss reserving technique. The chain-ladder method is used in both the property and casualty [1] [4] and health insurance [5] fields. Its intent is to estimate incurred but not reported claims and project ultimate loss amounts. [5]
Specifically, the hinge loss equals the 0–1 indicator function when (()) = and | |. In addition, the empirical risk minimization of this loss is equivalent to the classical formulation for support vector machines (SVMs). Correctly classified points lying outside the margin boundaries of the support vectors are not penalized, whereas ...
If the firm decides to operate it will produce where marginal revenue equals marginal costs because these conditions insure profit maximization (or equivalently, when profit is negative, loss minimization). [11]
In 2024, of the 21.6 million Americans who purchased health insurance plans from ACA marketplaces, 20.1 million received enhanced subsidies, according to the CBO.