Determination of Insurance Premium Rates with Aggregation Claims at BPJS with Exponential and Gamma Distributions

Badan Penyelenggara Jaminan Sosial (BPJS) is a legal entity that has been provided by the government for the community with the aim of providing protection for all workers in Indonesia from certain socio-economic risks. National development, marked by planned and continuous strides, embodies a commitment to engage all societal, national, and state levels in fostering progress. Encompassing political, economic, socio-cultural, and defense and security realms, the development is meticulously designed to be comprehensive, targeted, integrated, gradual, and sustainable. The overarching objective is to catalyze an augmentation of national capabilities, align the standard of living for the Indonesian people with developed nations, and elevate overall welfare. To establish premium rates, a method involves multiplying the conditional expected value of claim frequency by the size of the claim, considering observed risk characteristics. A claim, in this context, constitutes a formal request to the insurance company, seeking payment in accordance with the terms of the agreement. The primary objective of this study is to establish the insurance premium rates applicable to policyholders (the insured) through the estimation of parameters in the distribution governing aggregate claims. This involves the distribution of both the number of claims and the size of the claims, and the estimation is performed using the moment method. Premium computations are executed based on two key principles: the pure premium principle and the expected value principle. This research produces the conclusion that the Poisson-Gamma aggregate claims distribution has a premium amount of 3.61 times greater than Poisson-Exponential due to the application of the anticipated value principle, namely IDR 4,403,542.94 per month and IDR 1,219,878.45 per month, respectively.