Aggregation Functions and Personal Utility Functions in General Insurance

The modeling of a utility function’s forms is a very interesting part of modern decision making theory. We apply a basic concept of the personal utility theory on determination of minimal net and maximal gross annual premium in general insurance. We introduce specific values of gross annual premium on the basis of a personal utility function, which is determined empirically by a short personal interview. Moreover, we introduce a new approach to the creation of a personal utility function by a fictive game and an aggregation of specific values by mixture operators.