New Approach to the Elaboration of Algerian Risks-Industrial Index (IR)

Abstract

In this article, we propose to set out some avenues to adapt the Algerian industrial risk index to national data. Firstly, we evaluate the methods used in Algeria to calculate this index while conducting an econometric and statistical study. This study improves that the Algerian index (RI) is explained to more than 96 of various anomalies in these methods who have reached their limits and we will propose a new approach to calculate this index, this last consists in the correction of the weights of all coefficients in the French formula by the method of the weighting of the gross domestic product (GDP), Algerian and French, respectively, as first place to stop our index at its base 1000 in January 2009, and from this date this last one will take half-yearly values readjusted by the values of the other indices that they compose it namely: ICC (construction cost index) of CNAT (national technical assistance center), IPPI (industrial producer price index), IPI (industrial production index) source national statistics office (N.O.S). By validating the transitivity property of our new index, we will establish exclusively a direct application on an insurance portfolio. The results provided by this new approach show an incorrect reclassification of the risks obtained, over the same period, by the two old approaches and the new index, which shows a risk management of insurance contracts problem for the insurer.