Transformations  in
Business & Economics

Transformations in Insurance Market: Modern Accounting Method of Insurance Tariffs
Stasys Girdzijauskas, Jonas Čepinskis, Edita Jurkonytė

ABSTRACT. In this article, the main principles of the original logistic insurance rates theory are presented. Insurance calculations could be based on the new – logistic limit model of the population evolution. The investigation has shown that a newly proposed logistic theory could be applied to the calculation of interest or the estimation of investment projects, as well as to discount of value expressions, determination of the present monetary values, and management of money currents, that means it could be adapted to calculation of insurance annuities as well.

There are concrete examples in the article, which state that the new principle in calculation systems is possible based on the logistic discount. Although calculations are more complicated and completely possible only using information technologies, yet the results achieved on the basis of the logistic theory are more accurate and more reliable. To say more, the application of the logistic theory offers qualitatively new results. The usage of the logistic discount of money flow may explain the formation of the so-called “price bubbles”. The insurance sphere effect of the price bubbles may change by the rates growing. The effect of the price bubbles may affect the insurance sphere by significant change (increase) of rates.

The main goal of this article is to present modern method of calculating annuity insurance tariffs, to analyse the specifics of calculating logistic annuity insurance tariffs and having highlighted the main differences to compare usual and logistic methods of calculating annuities insurance tariffs.

KEYWORDS: insurance market, insurance tariffs, usual and logistic annuities, logistic capital, capital resources.

JEL classification: G22, G24.