volrisk (version 0.1.0)

calc_pc: 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)

Value

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

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()