Question
You must model the total loss with the Collective Risk Model, and calculate individual premiums. Let there be 5000 policy holders. Use Neg Bin(r =
You must model the total loss with the Collective Risk Model, and calculate individual premiums. Let there be 5000 policy holders. Use Neg Bin(r = 4, p = 1/15.5) for the frequency distribution. Assume ground-up loss distribution is X ~ Exp(2000). Show all work.
What is the mean and variance for the claim frequency, N?
For ground-up loss, X, what is expectation, variance, and second moment?
If the Neg Bin(r = 4, p = 1/15.5) was a result of Poisson-Gamma mixture, how would we model claims from each driver and driver population as a whole? Briefly explain
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started