(b) An insurance company insures five car hire companies operating fleets of sim- ilar cars. Each...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
(b) An insurance company insures five car hire companies operating fleets of sim- ilar cars. Each car hire company has a single policy covering all of its cars for a single year. The data below show the aggregate claims (e000), Y, together with the number of cars operated, P, by each company in the past 5 years. Year 1 Year 2 Year 3 Year 4 Y,P Y,P Y,P Y,P Company 1 85,50 52,80 35,40 48,70 Company 2 25,65 14,40 15,14 20,20 Company 3 12,60 35,48 4,6 5,15 (i) Calculate the expected claim payment for Company 1 in the coming year using the Bayes Empirical Credibility Model 1. [7] (ii) Calculate the expected claim payment for Company 1 in the coming year using the Bayes Empirical Credibility Model 2, assuming the expected number of cars operated in the coming year for Company 1 is 60. [7] (b) An insurance company insures five car hire companies operating fleets of sim- ilar cars. Each car hire company has a single policy covering all of its cars for a single year. The data below show the aggregate claims (e000), Y, together with the number of cars operated, P, by each company in the past 5 years. Year 1 Year 2 Year 3 Year 4 Y,P Y,P Y,P Y,P Company 1 85,50 52,80 35,40 48,70 Company 2 25,65 14,40 15,14 20,20 Company 3 12,60 35,48 4,6 5,15 (i) Calculate the expected claim payment for Company 1 in the coming year using the Bayes Empirical Credibility Model 1. [7] (ii) Calculate the expected claim payment for Company 1 in the coming year using the Bayes Empirical Credibility Model 2, assuming the expected number of cars operated in the coming year for Company 1 is 60. [7]
Expert Answer:
Answer rating: 100% (QA)
a The expected claim payment for Company 1 in the coming year using the Bayes Empirical Credibility Model 1 is Expected Claim Payment Average of Past ... View the full answer
Related Book For
Introduction to Operations Research
ISBN: 978-1259162985
10th edition
Authors: Frederick S. Hillier, Gerald J. Lieberman
Posted Date:
Students also viewed these mathematics questions
-
An insurance company insures four large risks. The number of losses for each risk is independent and identically distributed on the points {0, 1, 2} with probabilities 0.7, 0.2, and 0.1,...
-
The data below show the number of three-base hits (triples) and the number of home runs hit during the season by a random sample of MLB teams. Is there a significant relationship between the data?...
-
The data below show the number of hurricanes (category 3 or higher) recorded annually before and after 1970. Create an appropriate visual display, and determine whether these data are appropriate for...
-
Most websites have images. There are many different features and functionalities that can be used to work with images via the use of JavaScript. These include preloading, rollovers, and cycling...
-
On January 1, 2015, Harter Company had Accounts Receivable $139,000, Notes Receivable $25,000, and Allowance for Doubtful Accounts $13,200. The note receivable is from Willingham Company. It is a...
-
Calculate the solubility of Mn(OH)2 in grams per liter when buffered at pH (a) 7.0, (b) 9.5, (c) 11.8.
-
Find the = 0.10 critical value for the chi-square distribution with 4 degrees of freedom.
-
Many companies use budgets for three purposes. First, they use them to plan how to deploy resources to best serve customers. Second, they use them to establish challenging goals, or stretch targets,...
-
b) Compute the difference in the log value that optimist and pessimists attach to the bond, i.e. In Vo In Voss. In = VOpt. 0,T 0,T VPs). How does bond maturity affect the disagreement between...
-
We set the potential energy in the particle in the box equal to zero and justified it by saying that there is no absolute scale for potential energy. Is this also true for kinetic energy?
-
Suppose Ladner Environmental Services (LES) holds a note receivable from a client. At the end of April, LES has earned $500 of interest revenue on the note. a. Which accounts need to be adjusted at...
-
An act of willful or malicious burning of anothers property. a. arson b. bribery c. burglary d. extortion e. felony f. forgery g. misdemeanor h. perjury i. robbery j. white-collar crime
-
The benefi t received and the loss suffered by parties to a contract. a. barren pr omise b. consideration c. forbearance d. gratuitous promis e e. general re lease f. moral c onsideration g. past c...
-
A classifi cation of less serious crimes such as certain traffi c of fenses. a. arson b. bribery c. burglary d. extortion e. felony f. forgery g. misdemeanor h. perjury i. robbery j. white-collar...
-
Do you think it is unethical for an underage person who looks much older to enter into a contract with another person who in good faith expects the underage party to fulfi ll the terms of the...
-
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn. Preexisting duty refers to existing debts that must be paid.
-
Compute and draw (or plot on a computer) the rotation curves for the following distributions of matter. (a) M(r) = kr (b) M(r) = h
-
Design an experiment to demonstrate that RNA transcripts are synthesized in the nucleus of eukaryotes and are subsequently transported to the cytoplasm.
-
A company owns both a factory to produce its products and a retail outlet to sell them. A certain new product will be sold exclusively through this retail outlet. Its inventory of this product will...
-
Consider the birth-and-death process with the following mean rates. The birth rates are 0 = 2, 1 = 3, 2 = 2, 3 = 1, and n = 0 for n > 3. The death rates are 1 = 3, 2 = 4, 3 = 1, and n = 2 for n > 4....
-
Ralph Edmund loves steaks and potatoes. Therefore, he has decided to go on a steady diet of only these two foods (plus some liquids and vitamin supplements) for all his meals. Ralph realizes that...
-
The major reason that the difference and ratio estimation methods would be expected to produce audit efficiency compared to mean estimation is that the a. Number of members of the populations of...
-
Probability proportional to size sampling (PPS) is normally used when it is thought that the population contains a a. Few understatements. b. Large number of understatements. c. Few overstatements....
-
Vale has decided to use PPS sampling in the audit of a client's accounts receivable balances. Vale plans to use the following PPS sampling table: What sample size should Vale use? a. 120 b. 108 c. 60...
Study smarter with the SolutionInn App