Abstract:
In the classical risk process, ruin is the situation when the surplus process falls to
zero or below. To predict the ruin, ruin probability can be estimated to avoid the
probability of bankruptcy in an insurance company. Moreover, the ruin probability
is calculated through survival probability, which when ruin does not occur. In case
where the function is of exponential order, the ruin probability is calculated using
the Laplace transform. In other case, numerical approximations such as Euler’s
method and Trapezoidal rule is used. Ruin and survival probability show that when
the survival probability moves to 1, the ruin probability moves to 0.
