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The number of claims per exposure follows a Poisson distribution with a mean of 10. Claim sizes follow a lognormal distribution with parameters u=1
The number of claims per exposure follows a Poisson distribution with a mean of 10. Claim sizes follow a lognormal distribution with parameters u=1 and o=1. The number of claims per exposure and claim sizes are independent. The method of limited fluctuation credibility is used, and the full credibility standard has been selected so that the total claim dollars per exposure will be within 10% of expected total claim dollars per exposure 95% of the time. The partial credibility factor Z is calculated for each of the following three approaches: a. based on 60 exposures b. based on 700 claims based on a total claim amount of 3,000. Rank Za, Zb, Ze from largest to smallest.
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Zb Za Zc b is the largest because it has the most data and therefore the most information ...Get Instant Access to Expert-Tailored Solutions
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