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Abstract
A mathematical model of dynamical systems consisting of differential algebraic equations (DAEs) has been successfully developed in various fields of study, which include computational biology, control systems design, fluid dynamics and many more. In this paper, a mathematical model constituting DAEs of policy holder switching within the life insurance market is introduced. In this study, only two theoretical cases of policy holder switching are considered, which are simulated by varying the values of rate constants within the mathematical model. It is observed that the mathematical model provides the future trend of companies depending on their positive/negative features. This model is one of the initial steps towards determining the future trends of companies, so that insurance companies can take important measures to rectify issues (such as decline and inability to capture new policy holders) that are going to occur in the future.
Acknowledgements
The authors would like to thank Dr L. Shark (University of Central Lancashire, UK) for valuable discussions that helped them to improve the quality of the paper.