Society of Actuaries
Dr. Liang Hong, Mathematics Department, SEMS, RMU - 2016 - 2018
The two PIs on this project – Dr. Liang Hong (Robert Morris University) and Dr. Ryan Martin have received a grant for $19,500 from the Society of Actuaries, Canada for conducting mathematical research as a collaborative team to improve efficiency of the life insurance business. Liang Hong is a Fellow of the Society of Actuaries (FSA) is an Associate Professor of Mathematics at RMU, and Ryan Martin is an Associate Professor in the Department of Mathematics, Statistics, and Computer Science at the University of Illinois at Chicago. Their research focuses on selection of rating variables which is critical to many aspects of ratemaking such as risk classification, rating manual development, and underwriting guideline design. Failure to identify an important rating variable may lead to unfair premiums which, in turn, leads to adverse selection and a reduction in the company’s profits. On the other hand, identifying all the key rating variables will allow a company to determine an equitable rate and prevent adverse selection; this may give the company a competitive edge over other firms. Our goal is to develop some Bayesian techniques for rating variable selection.