Credibility Theory and Its Using In Insurance Practice Cover Image

Credibility Theory and Its Using In Insurance Practice
Credibility Theory and Its Using In Insurance Practice

Author(s): Silvie Kafková
Subject(s): Methodology and research technology
Published by: Masarykova univerzita
Keywords: Bühlmann model; premium; theory of credibility;
Summary/Abstract: The subject of this paper is to introduce the theory of credibility. Credibility theory is a set of quantitative tools that allows an insurer to estimate future premiums based on past experience of policy holder. First, risk factor for policyholders is defined. Then sorts of premium are described and the credibility premium is introduced as a linear function of the past data.