Abstract:
In Indonesia, the insurance firm usually calculate the premiums by Indonesia Mortality
Table. But, there are several method to calculate the premiums like De Moivre Method.
De Moivre Method is a method to calculate the probability of survival and dies from an
uniform distribution. This method is simpler method than others but the result is very far
with Indonesia Mortality Table. The author wanted the De Moivre Method can run in
Indonesia by equalizing the probability values by Modified De Moivre Method. This
method is almost same with De Moivre Method but there is an alpha value as a parameter.
The author compared and equalied the probability of survival between the Indonesia
Mortality Table 2019 and Modified De Moivre Method by adjusting the alpha values.
Therefore, Modified De Moivre can run in Indonesia. The author used the median and
harmonic mean to find the alpha value. Median is a measure to find the central point from
increasing order of size sample and harmonic mean is a measure to find the average where
it is sensitive with small value. This study used term life insurance because this type has
a low premium. From this study, it can be concluded that the cheaper premium is the
Modified De Moivre Harmonic Alpha Value Method and the most expensive is the
Modified De Moivre Median Alpha Value Method because the harmonic alpha value is
smaller than others. The smaller of alpha value, then the survival probability will increase,
the dies probability will decrease, and the premium will decrease.
