Evaluating Risk of Smokers in Life Insurance Contracts Using Fuzzy Inference Systems

Using Information Technology in the Insurance Industry has openned new opportunities. IT applications increased the expectation for precision and speed in insurance procedures. Risk evaluation is a key process in issuing life insurance. Insurers try to estimate risk based on stated customer information, expert opinion, medical knowledge, and existing data from previous contracts. Risk assessment is then used to determine a premium that satisfies the customer and allows for viable risk management. This paper uses the views of experts and insurance certified doctors to determine factors influencing risk of smokers. To calculate the risk rate we use a Fuzzy Inference System (FIS). The performance of FIS is tested using expert opinions on existing profiles.