A new fuzzy deductible contract model.

This paper explores the problem of insurer's decision on optimal deductible contract design, from the insurer's perspective of maximization the expected welfare in an uncertain environment. By describing the subjective judgment of the insurer about the insured's private information as fuzzy variables, and devising the contract as a vector with two dimensions: premium variable and deductible amount variable, a new fuzzy deductible contract model is built, the equivalent model and a sufficient condition are presented. A necessary condition of the optimal contract strategies is obtained on the basis of optimal control theory. A numerical example is presented, which illustrates the effectiveness of the proposed model. [ABSTRACT FROM AUTHOR]