A Survey of Credibility Theory.
CALIFORNIA UNIV BERKELEY OPERATIONS RESEARCH CENTER
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Credibility theory is the name given by American actuaries to linear estimation formulae developed to experience-rate insurance premiums. These formulae can be viewed as linear Bayesian forecasts of a conditional mean, exact under certain conditions, and best least-squares approximations otherwise. This paper surveys the recent theorectical developments in the actuarial literature, relates these results to other linear estimation methods, and describes a variety of special models and applications. Author
- Economics and Cost Analysis
- Operations Research