calc_pc: Calculate Profit Commission for Reinsurance

In volrisk: Simulation of Life Reinsurance with Profit Commission

Calculate Profit Commission for Reinsurance

Description

Calculates profit commission payouts for a single set of reinsurance cash flows.

This function supports standard profit commission rules using input cash flows and applies key parameters such as the profit commission rate, administrative expense rate, and loss carryforward logic.

Usage

calc_pc(PREM, CLAIM, pc_rate, me, loss_carry, duration)

Arguments

PREM	Numeric vector of premiums.
CLAIM	Numeric vector of claims.
pc_rate	Profit commission rate (typically between 0 and 1).
me	Administrative expense rate deducted from premium (typically between 0 and 1).
loss_carry	Whether to apply loss carryforward across periods. Must be "Y" (yes) or "N" (no).
duration	Numeric vector of durations. Must match length of PREM and CLAIM and be consecutive integers.

Value

A numeric vector of calculated profit commissions (same length as duration).

Examples

# Simple numeric vectors
PREM <- c(1000, 1000, 1000, 1000, 1000, 1000)
CLAIM <- c(600, 1800, 600, 600, 600, 600)
duration <- 1:6
calc_pc(PREM, CLAIM, pc_rate = 0.9, me = 0.05, loss_carry = "Y", duration = duration)

# Using example_simulation dataset
example_simulation_with_PC <- example_simulation %>%
  dplyr::group_by(split, sim_n) %>%
  dplyr::mutate(
  PC = calc_pc(PREM,
               CLAIM,
               pc_rate = 0.9,
               me = 0.05,
               loss_carry = "N",
               duration = DURATION)) %>%
  dplyr::ungroup()

volrisk documentation built on June 14, 2025, 9:07 a.m.