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Enhanced Maximum Likelihood Models For Underreported Variables: Extending To Multiple Claims Dimension, Shalaka Sudhanshu Sarpotdar
Enhanced Maximum Likelihood Models For Underreported Variables: Extending To Multiple Claims Dimension, Shalaka Sudhanshu Sarpotdar
Graduate Research Theses & Dissertations
This thesis builds upon the foundations laid out in Xia et al. [2023], which explored the utilizationof Maximum Likelihood approach to model misrepresentation data in Generalized Linear Models (GLM) ratemaking models. We introduce the concept of “underreported variables”, a form of insurance misrepresentation where insured individuals provide inaccurate information about risk factors that influence insurance eligibility, premiums, and insured amounts. Unlike fraudulent misrepresentation, underreported variables arise from a lack of awareness regarding the insured’s mental and physical health conditions, rather than fraudulent intent. The study rigorously tests the proposed model using health insurance data and extends its applicability to other …