Question: Aggregate claims S are Compound Poisson with = 2 and severity distribution P ( X = 1 ) = 1 4 , P ( X
Aggregate claims S are Compound Poisson with and severity distribution
PX PX
For a premium of P an insurer covers aggregate claims and agrees to pay a dividend D equal to the excess, if any, of of the premium over of the aggregate claims. Determine the excess of premium over expected claims and dividends.
Hint: D max S
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