Mwau, C., Omukami, H. (2024). Modeling Pricing and Profit Testing of Chronic Disease's Insurance Policies Using Prostate Cancer Data in Kenya. The Egyptian Statistical Journal, 68(2), 146-158. doi: 10.21608/esju.2024.318958.1043
Cynthia Mwau; Howard Omukami. "Modeling Pricing and Profit Testing of Chronic Disease's Insurance Policies Using Prostate Cancer Data in Kenya". The Egyptian Statistical Journal, 68, 2, 2024, 146-158. doi: 10.21608/esju.2024.318958.1043
Mwau, C., Omukami, H. (2024). 'Modeling Pricing and Profit Testing of Chronic Disease's Insurance Policies Using Prostate Cancer Data in Kenya', The Egyptian Statistical Journal, 68(2), pp. 146-158. doi: 10.21608/esju.2024.318958.1043
Mwau, C., Omukami, H. Modeling Pricing and Profit Testing of Chronic Disease's Insurance Policies Using Prostate Cancer Data in Kenya. The Egyptian Statistical Journal, 2024; 68(2): 146-158. doi: 10.21608/esju.2024.318958.1043
Modeling Pricing and Profit Testing of Chronic Disease's Insurance Policies Using Prostate Cancer Data in Kenya
1Department of Mathematics and Actuarial Science, Kisii University
2Institute for Educational Development, East Africa, The Aga Khan University.
Abstract
Chronic diseases have been on the rise globally and more so in the African continent. Treatment of chronic diseases requires lots of finances hence posing a challenge even to those people who are considered financially stable. Chronic diseases are expected to rise even further due to the rapid lifestyle change. In an attempt to mitigate the challenge of accessing treatment for chronic diseases, we develop a model for pricing and profit testing chronic disease insurance policy using the modified equivalence principle. We use the Kenyan mortality tables for the computation as they reflect the true mortality rate of the population considered. Moreover, we developed a prostate cancer insurance policy using real-time prostate cancer data obtained from an oncology centre in Kenya. The estimated premiums between ages 40-90 where prostate cancer is most prevalent are tabulated in table (4) and represented in figure (1). The reserves model can be used to project premiums for chronic diseases if their cost of treatment is determined. The model provides a good fit to data because it projects premiums which are affordable and profitable with a profit margin of the prostate cancer policy at 8.31%.
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