The model of insurance premium rates of motorcycle payment futures contract by using quasi Monte Carlo simulation method and spot future Parity theorem

One way to avoid risk is to transfer the risk to another party, such as in insurance with the protection that can cover losses from risks that occur with an agreement where the insurer receives a premium from the insured party. Generally, the premium value of a motorcycle payment futures contract is determined by several variables, such as the price of the motorcycle, contract duration, and the interest rate that are always changing every day. Dynamic market price movements (changing every day) will make it difficult for companies insurances to determine the premium price to be paid. In this article, insurance premiums price is determined by using the quasi Monte Carlo simulation method with specific random number sequences, which is then compared to the Monte Carlo Method and Spot Future Parity Theorem. The data used are motorcycle premium prices from January 2015 until December 2019 to analyze the premium price with a two years contract period. The results of quasi Monte Carlo simulation show that the price of insurance premiums will converge to a value with a small standard error. For insurance companies, the quasi Monte Carlo Method provides better benefits because this method offers a higher price premium estimation compared to the Spot Future Parity theorem.