Exam MAS-II Practice Question 3

Study guide: Exam MAS-II

A policyholder has four years of its own loss experience, with an average annual aggregate loss of 900. For the portfolio it belongs to, you are given:

• Collective (prior) mean annual aggregate loss: 600
• Expected value of the process variance of one year's aggregate loss: 120,000
• Variance of the hypothetical means: 10,000

Calculate the Bühlmann credibility estimate of this policyholder's expected annual aggregate loss.

• A) 600
• B) 623
• C) 675
• D) 700
• E) 825

Answer this question and see the worked solution

Concepts tested

• Risk Experience
• Bühlmann Credibility
• Expected Value of Process Variance
• Variance of Hypothetical Means

More questions from this set

• Exam MAS-II Practice Question 2
• Exam MAS-II Practice Question 4