Model for Determining Insurance Premiums Taking into Account the Rate of Economic Growth and Cross-Subsidies in Providing Natural Disaster Management Funds in Indonesia

Round 1

Reviewer 1 Report

1) Insurance rates are given but there are no information about province sizes and insurance/person.

2) Figure 1 could be updated/changed. It is not easy to read.

3) Abstract is well written. On the other hand, it could be simplified. There are some repetitions. 

4) Currencies are given as IDR. There is a yearly inflation on IDR over USD. Currencies may given in both currencies or just UDS.

5) Conclusions and future works could be extended.

Minor editing of English language required. There are some grammatical/typo mistakes in the text. The semantic integrity of some paragraphs also needs to be checked. A proofreading process is needed.

Author Response

Dear Reviewer,

We thank you in advance for your comments and suggestions for our paper. We have made adjustments and improvements to the paper based on your suggestions and directions. Here we attach the response we did based on your suggestion.

Hopefully our paper can meet the criteria of this review process.

Thank you,

Regards.

 

Comment 1: Insurance rates are given but there are no information about province sizes and insurance/person.

Dear Reviewer,

Thank you for your criticism and suggestions, here are the responses which we have corrected according to your instructions. We have added an explanation regarding insurance rates (please check lines 340-356). Hopefully it can answer what the reviewer hopes for.

Comment 2: Figure 1 could be updated/changed. It is not easy to read.

Dear Reviewer,

Thank you for your criticism and suggestions, here are the responses which we have corrected according to your instructions. We have made improvements by replacing Figure 1 with a new one. Hopefully it will be clearer and as expected by the reviewer.

 

Comment 3: Abstract is well written. On the other hand, it could be simplified. There are some repetitions.

Dear Reviewer,

Thank you for your criticism and suggestions, here are the responses which we have corrected according to your instructions. We've made improvements to the Abstract section (please check lines 16-35). Hopefully it will be as expected by the reviewer.

Comment 4: Currencies are given as IDR. There is a yearly inflation on IDR over USD. Currencies may given in both currencies or just UDS.

Dear Reviewer,

Thank you for your criticism and suggestions, here are the responses which we have corrected according to your instructions. We have made improvements by adding an explanation of why the research used IDR currency (please check lines 340-356). Hopefully it will be as expected by the reviewer.

Comment 5: Conclusions and future works could be extended.

Dear Reviewer,

Thank you for your criticism and suggestions, here are the responses which we have corrected according to your instructions. We've made improvements to the Conclusions section (please check lines 536-553). Hopefully it will be as expected by the reviewer.

Comment 6: Minor editing of English language required. There are some grammatical/typo mistakes in the text. The semantic integrity of some paragraphs also needs to be checked. A proofreading process is needed.

Dear Reviewer,

Thank you for your criticism and suggestions, here are the responses which we have corrected according to your instructions. We have made improvements to the English writing section by involving native English speakers. Hopefully it will be as expected by the reviewer.

Author Response File: Author Response.pdf

Reviewer 2 Report

This paper tries to evaluate insurance premiums for natural disasters in Indonesia. The assessment is important while there are some weaknesses to standardize. In Table 1&2, there are 3 categories highlighting areas of possible natural disaster and economic growth. However, there is no definition to be ranked to those categories. The title should be included “Indonesia” since this paper just focuses and applies in the country only. Discussion must rewrite since it is unclear whether this model is relevant/useful or not as compared to the previous research. The discussion is too short to understand the novelty and appropriateness. In conclusion, authors only described in Indonesia only comparing the provinces. Since it is international journal, they need to summarize considering international impacts.

English proofreading would be required.

Author Response

Dear Reviewer,

We thank you in advance for your comments and suggestions for our paper. We have made adjustments and improvements to the paper based on your suggestions and directions. Here we attach the response we did based on your suggestion.

Hopefully our paper can meet the criteria of this review process.

Thank you,

Regards.

 

Comment: This paper tries to evaluate insurance premiums for natural disasters in Indonesia. The assessment is important while there are some weaknesses to standardize. In Table 1&2, there are 3 categories highlighting areas of possible natural disaster and economic growth. However, there is no definition to be ranked to those categories. The title should be included “Indonesia” since this paper just focuses and applies in the country only. Discussion must rewrite since it is unclear whether this model is relevant/useful or not as compared to the previous research. The discussion is too short to understand the novelty and appropriateness. In conclusion, authors only described in Indonesia only comparing the provinces. Since it is international journal, they need to summarize considering international impacts.

Dear Reviewer,

Thank you for your criticism and suggestions, here are the responses which we have corrected according to your instructions.

1. We have defined 3 regional categories based on the potential for natural disasters and the level of economic growth (please check lines 376-383).
2. In the title section we have made improvements by adding "Indonesia"
3. In section 4 of the Discussion, we have made improvements according to the suggestions given (please check lines 469-515)
4. We have made improvements to the conclusion section according to the suggestions given (please check lines 536-553).

Hopefully it will be as expected by the reviewer.

Author Response File: Author Response.pdf

Reviewer 3 Report

The paper entitled “Models for Determining Insurance Premiums Taking into Ac-2 count the Rate of Economic Growth and Cross Subsidies in 3 Provision of Natural Disaster Management Funds” shows a model to determine insurance premiums for natural disaster using a jumping processes method and cross-subsidy scheme. The paper also provides statistical analysis for the cases in a country.

General comments:

This paper describes a probabilistic model to determine insurance premiums for natural disasters and related statistical analysis. The model and statistical analysis look reasonable. However, the manuscript lacks critical elements for being published as a research paper. The manuscript does not clearly identify the original and scholarly contributions in the model. The manuscript does not provide detailed analysis of how the model parameters affect the results. The interpretation of the result are not thorough either. Without these, the readers may not easily recognize the significance of this study.

Specific comments:

The contents in Section 2 appear to come from other research papers and textbooks. However, they are not clearly stated. Whenever any contents are not original, they should be cited precisely.

The contents of Section 2 should not be considered as “Materials and Methods.” They look like some theoretical backgrounds based on existing knowledge or previous study. No “materials” are used in this study, either. The standard section name “Materials and Methods” may not be applicable for this study. Please find a suitable title.

A section of literature review or state-of-the-art may be necessary. This section may include a part of the current Section 2.

Although Section 3.1 (the first sub-section of Results section) provides the main equations for this study, it has not been clearly identified how much originality exists in the suggested equations. This would be critical to evaluate the scholarly contribution of this manuscript. If the equations are just combinations of widely known elements (economic growth, disaster frequency, etc.), the manuscript should clearly state how much the integrated equation is innovative, in particular compared to the previous equations in the existing literature. Otherwise, the suggested equations would be just simple equation writing.

The selection of the numerical values of the parameters are not clearly explained in terms of the reasons. Why are some parameters 0.5 or 5% but not 0.4 or 10%?

Sections 3.2 and 4 did not provide the effects of the equation parameters on the insurance premium. There would be cases where some parameters have more influence than the others in certain conditions. Without such an analysis, the statistical analysis would be rudimentary calculation.

In general, the statistical analysis is too weak. No proper statistics have been provided.

The axis titles in Figure 1 should be switched.

The abstract and introduction sections could guide readers better if they describe the main problem, methodology, and the expected contributions more systematically and succinctly. The current abstract is extremely long but is too abstract (nonconcrete) in meaning. It does not reflect the main aspects of the model. The conclusion section does not clearly summarize the main outcome of the model and analysis. Its writing is quite abstract.

The writing can be improved. In overall the grammar is all right and sentences are clear in meaning. However, some paragraphs are too long, and thus they prevent clear understanding of the contents. Some sentences of similar meanings tend to repeat throughout the paper without clear purpose.

The capitalization of some words has problems.

Author Response

Dear Reviewer,

We thank you in advance for your comments and suggestions for our paper. We have made adjustments and improvements to the paper based on your suggestions and directions. Here we attach the response we did based on your suggestion.

Hopefully our paper can meet the criteria of this review process.

Thank you,

Regards.

Comment 1: General comments:

This paper describes a probabilistic model to determine insurance premiums for natural disasters and related statistical analysis. The model and statistical analysis look reasonable. However, the manuscript lacks critical elements for being published as a research paper. The manuscript does not clearly identify the original and scholarly contributions in the model. The manuscript does not provide detailed analysis of how the model parameters affect the results. The interpretation of the result are not thorough either. Without these, the readers may not easily recognize the significance of this study.

Dear Reviewer,

Thank you for your criticism and suggestions, here are the responses which we have corrected according to your instructions.

 

1. We have added an explanation for the original and scientific contribution of the model to this research (please check lines 158-167).
2. We have added explanations regarding model parameters and interpretation of research results (327-338 and 360-372)

Hopefully it will be as expected by the reviewer.

Comment 2: Specific comments:

The contents in Section 2 appear to come from other research papers and textbooks. However, they are not clearly stated. Whenever any contents are not original, they should be cited precisely.

The contents of Section 2 should not be considered as “Materials and Methods.” They look like some theoretical backgrounds based on existing knowledge or previous study. No “materials” are used in this study, either. The standard section name “Materials and Methods” may not be applicable for this study. Please find a suitable title.

A section of literature review or state-of-the-art may be necessary. This section may include a part of the current Section 2.

Although Section 3.1 (the first sub-section of Results section) provides the main equations for this study, it has not been clearly identified how much originality exists in the suggested equations. This would be critical to evaluate the scholarly contribution of this manuscript. If the equations are just combinations of widely known elements (economic growth, disaster frequency, etc.), the manuscript should clearly state how much the integrated equation is innovative, in particular compared to the previous equations in the existing literature. Otherwise, the suggested equations would be just simple equation writing.

The selection of the numerical values of the parameters are not clearly explained in terms of the reasons. Why are some parameters 0.5 or 5% but not 0.4 or 10%?

Sections 3.2 and 4 did not provide the effects of the equation parameters on the insurance premium. There would be cases where some parameters have more influence than the others in certain conditions. Without such an analysis, the statistical analysis would be rudimentary calculation.

In general, the statistical analysis is too weak. No proper statistics have been provided.

The axis titles in Figure 1 should be switched.

The abstract and introduction sections could guide readers better if they describe the main problem, methodology, and the expected contributions more systematically and succinctly. The current abstract is extremely long but is too abstract (nonconcrete) in meaning. It does not reflect the main aspects of the model. The conclusion section does not clearly summarize the main outcome of the model and analysis. Its writing is quite abstract.

Dear Reviewer,

Thank you for your criticism and suggestions, here are the responses which we have corrected according to your instructions.

1. In section 2, we have added quotations from the theory used and corrected the subtitles in section 2.
2. For the literature review of previous research, we have explained it in section 1 Introduction (73-127).
3. In section 3.1 we have added an explanation regarding what we did and the novelty of the research we conducted (please check lines 257-260). We have added an explanation regarding the originality of the developed model (please check lines 147-167)
4. We have added an explanation of the reasons for selecting the parameter numeric value of 0.5 (please check lines 360-372)
5. In Sections 3.2 and 4 we have provided an explanation of the parameters that influence the insurance premium determination model equation (please check lines 455-462 and 501-515)
6. In Figure 1, we have made improvements
7. In the Abstract section we have made overall improvements

We hope that the improvements we make can answer and match what the reviewer hopes for.

Comment 3: The writing can be improved. In overall the grammar is all right and sentences are clear in meaning. However, some paragraphs are too long, and thus they prevent clear understanding of the contents. Some sentences of similar meanings tend to repeat throughout the paper without clear purpose.

 

The capitalization of some words has problems.

Dear Reviewer,

Thank you for your criticism and suggestions, here are the responses which we have corrected according to your instructions. We have made improvements to the English writing section by involving native English speakers. Hopefully it will be as expected by the reviewer.

Author Response File: Author Response.pdf

Round 2

Reviewer 2 Report

Thanks for revision and taking into all my comments. I satisfied with your revision.

Moderate editing of English language will be required.