(b) An insurance company insures five car hire companies operating fleets of sim- ilar cars. Each...

 

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(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]

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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