Calculate limited expected value.

Free CAS MAS-I (Modern Actuarial Statistics I) lesson in Probability Models. 12 min read, ~1,871 words.

Limited expected value:, the expected loss after capping at limit. Survival form (easiest for parametric): for non-negative. Layer formula: expected payment in layer equals; stop-loss. Loss elimination ratio:, growing from 0 to 1 as increases. Exponential:. Pareto ( ):. Limit erosion: with a fixed limit, uniform inflation shrinks the effective...