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Insurance Premium Calculation Using Credibility Analysis: An Example From Livestock Mortality Insurance
Author(s) -
Pai Jeffrey,
Boyd Milton,
Porth Lysa
Publication year - 2015
Publication title -
journal of risk and insurance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.055
H-Index - 63
eISSN - 1539-6975
pISSN - 0022-4367
DOI - 10.1111/jori.12024
Subject(s) - livestock , credibility , credibility theory , actuarial science , business , economics , geography , forestry , political science , law
A BSTRACT A major problem facing livestock producers is animal mortality risk. Livestock mortality insurance is still at the initial stages, and premium computation approaches are still relatively new and will require more research. This study seeks to provide a first step for developing a better understanding of livestock insurance as a solution to mortality risk, as it explores improved methods for livestock mortality insurance modeling procedures, and premium computation, using credibility analysis. The purpose of this study is to develop improved estimates for livestock mortality insurance premiums for Canada under a credibility framework. We illustrate our approach through one example using livestock data from 1999 to 2007.