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P. 103
Foundations of Casualty Actuarial Science
precise in his references. The formula :
S= L
C
Where
S = severity
L = losses
C = claim account.
f) Pure Premium- Another important statistic is the
average loss per unit of exposure or the pure premium.
The formula for pure premium is :
P= L
E
Where
P = pure premium
L = losses
E = exposure units
or, pure premium can also be expressed as :
P= C X L
EC
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