Bonus-Malus System is a system in actuary that introduce the premium class (state)
partition, where the state is influenced by the number of annual claims reported by the policy
holder. We could base the determination of the state on the stationary distribution that represent
the number of policy holders in any state.
Swiss Bonus-Malus System has 22 state. The number of state that involved in this system result
in the difficulty of stationary distribution determination. Therefore, the aim of this paper is to
study a method to obtain stationary distribution of Swiss Bonus-Malus System by recursive
formula, with this recursive formula, the stationary distribution of Swiss Bonus-Malus System can
be determined easier.
Modification of this system with infinite state result in the changes of recursive formula to
obtain the stationary. This changes including the determining of base value of the recursive
formula.