Page 234 - ic92 actuarial
P. 234
The Insurance Times
The credibility also can be estimated from the claim free
discount, which is measured by the relative cost in the
second period of the insured with no claims in the first
period. When there are no claims the credibility formula
produces a projected second period cost of 1 minus the
credibility.
e) Total variance - Total variance 2 + 2 can be estimated
from the above first period data. The final formula
depends on the difference between the relative costs in
the second period, of insured with none and one claims
during the first period .This is applicable only to count
data and only for a gamma-distributed structure function.
The formula is :
2 = Var() = y - y
10
y
0
Measures of efficiency, even if they can be calculated
with accuracy and consistency, do not provide a
complete answer. The cost of the classification process
itself is ignored, for example.
Operational and social criteria may also be important.
Website: www.bimabazaar.com Call: 033-22184184 /40078428 234
Copyright@ The Insurance Times. 09883398055 / 09883380339
