See also: Accident insurance, VoseAggregateMC




Example model

Allows you to create complex frequency and severity distributions for use as argument in the VoseAggregateMC function.

  • Formatstring - a string expression (between "") with #1,#2,... where #n refers to the nth DistributionN argument.

  • DistributionN - a distribution object

Insurance policies are becoming ever more flexible in their terms, and more complex to model as a result.

For example, we might have a policy with a deductible of 5, and a limit of 20 beyond which the insurer pays only half the damages. Using a cost distribution of Lognormal(31,23) and an accident frequency distribution of Delaporte(3,5,40) we can model this as follows:

A1: =VoseLognormalObject(31,23)

A2: =VoseExpression("IF(#1>20,(#1-25)/2,IF(#1<5,0,#1))",A1)

A3 (output): =VoseAggregateMC(VoseDelaporte(3,5,40),A2)

The VoseExpression function allows one a great deal of flexibility. The '#1' refers to the distribution linked to Cell A1. Each time the VoseExpression function is called it will generate a new value from the Lognormal distribution and perform the calculation replacing '#1' with the generated value. The Delaporte function will generate a value (call it n) from this distribution, and the AggregateMC function will then call the VoseExpression function n times, adding as it goes along and returning the sum into the spreadsheet.

The VoseExpression allows several random variables to take part in the calculation. For example:


will model a cost that follows a Lognormal(20,7) distribution with 30% probability and zero with 70% probability;


will model a cost that follows a (Lognormal(20,7)+ VosePareto(4,7)) distribution with 30% probability and zero with 70% probability.



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