Dear List, Below is a simple, standard loss model that takes into account the terms of an insurance policy:
deductible <- 15 coverage.limit <- 75 insurance.threshold <- deductible + coverage.limit tmpf <- function() { loss <- rlnorm(rpois(1, 3), 2, 5) sum(ifelse(loss > insurance.threshold, loss - coverage.limit, pmin(loss, deductible))) } net <- replicate(1000000, tmpf()) Now, I would like to enhance the model by incorporating the following two probabilities: 1. Probability of claim being accepted by the insurance company, say, 0.8 2. Probability of payout by the insurance company, say, 0.999 Could anyone suggest how one might do this? platform i386-pc-mingw32 arch i386 os mingw32 system i386, mingw32 status major 2 minor 2.1 year 2005 month 12 day 20 svn rev 36812 language R Thanks, ______________________________________________ R-help@stat.math.ethz.ch mailing list https://stat.ethz.ch/mailman/listinfo/r-help PLEASE do read the posting guide http://www.R-project.org/posting-guide.html and provide commented, minimal, self-contained, reproducible code.