Probability of ruin in discrete insurance risk model with dependent Pareto claims

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Authors

Constantinescu, Corina D.
Kozubowski, Tomasz J.
Qian, Haoyu H.

Issue Date

2019

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Article

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Keywords

Actuarial science , compound binomial risk model , dependence by mixture , discrete Pareto distribution , geometric distribution , heavy tail , mixture , power law , ruin probability , zero-altered distribution , zero-inflated distribution , zero-modified distribution

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Abstract

We present basic properties and discuss potential insurance applications of a new class of probability distributions on positive integers with power law tails. The distributions in this class are zero-inflated discrete counterparts of the Pareto distribution. In particular, we obtain the probability of ruin in the compound binomial risk model where the claims are zero-inflated discrete Pareto distributed and correlated by mixture.

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Constantinescu, C. D., Kozubowski, T. J., & Qian, H. H. (2019). Probability of ruin in discrete insurance risk model with dependent Pareto claims. Dependence Modeling, 7(1), 215�"233. doi:10.1515/demo-2019-0011

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Creative Commons Attribution 4.0 International

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2300-2298

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