Question
You are given: (i) Claim frequency follows a Poisson distribution with mean . (ii) Claim severity follows an exponential distribution with mean . (iii) Claim
You are given: (i) Claim frequency follows a Poisson distribution with mean . (ii) Claim severity follows an exponential distribution with mean . (iii) Claim frequency and severity are independent. (iv) There were 100 claims in the first year. (v) The aggregate loss in the first year was 700,000. (vi) The manual premium for the first year was 500,000. (vii) The full credibility standard is to be within 10% of the expected aggregate loss 90% of the time. Determine the classical credibility net premium, in thousands of dollars, for the second year.
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