Calculations for the (a,b,0) and (a,b,1) Classes
Free SOA Exam FAM (Fundamentals of Actuarial Mathematics) lesson in Severity, Frequency, and Aggregate Models. 12 min read, ~1,744 words.
Iterate:; at the factor is always. ZT starting value:, then apply the same recursion factors from onward. ZM starting value:. Variance-to-mean ratio equals: Poisson = 1, binomial < 1, NB 1. Mean: for Poisson and NB. Panjer's recursion requires (a,b,0) frequency; zero-truncated or logarithmic frequency needs a modified approach.
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What this lesson covers
- Content
- Example 1
- Example 2
- Example 3
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- 2g
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