Special class of distorted premium principle based on an extension of the exponential-geometric distribution

Abstract

In this paper a new probability density function with both unbounded and bounded sup- port is presented. The new distribution, called modi ed exponential-geometric distribution arises from the exponential-geomeric distribution introduced by Adamidis and Loukas [1]. It presents a variety of shapes of density function and hazard rate function. The distribution with scale-transformed bounded support is considered as an alternative to the classical beta distribution and is shown to have an application in insurance. In particular, we suggest a special class of distorted premium principle based on this distribution and we compare it with the dual power premium principle. Moreover, the proposed distribution with un-bounded support is used as a lifetime model and is considered as an attractive alternativeto some existing models in the reliability literature.