Conference Program Home
  My Program

All Times EDT

Abstract Details

Activity Number: 474 - Emerging Methods and Applications in Insurance Data Science
Type: Topic Contributed
Date/Time: Wednesday, August 10, 2022 : 2:00 PM to 3:50 PM
Sponsor: Casualty Actuarial Society
Abstract #320876
Title: Modeling of Fire Contagion with Applicatin in Farm Insurance
Author(s): Jean-Philippe Boucher*
Companies: UQAM
Keywords: Fire Contagion; Farm Insurance; Ratemaking; Exponential Distributions

In a farm, a fire that starts in any structure can spread to all other structures of that same farm, to barns, granaries, silos, etc.. Intuitively, we then expect that a farm with more structures will be more at risk of fire propagation than a smaller one. From an actuarial perspective, as the total premium for farm insurance is the sum of premiums of each structure of that farm, it is therefore necessary to propose a way to compute each premium by considering the risk of fire propagation. Based on the distances between structures on the same farm, we propose a new pricing approach that considers fire propagation. The proposed model makes it possible to analytically compute the probability of fire propagation as a function of the fire origin. This can in turn be used to price all individual structures of any given farm. A practical application of the model based on insurance data and satellite images is given.

Authors who are presenting talks have a * after their name.

Back to the full JSM 2022 program