Credibility Theory Of Actuary

Credibility theory can be seen as the basic paradigm underlying the pricing of insurance products. It resides on the two fundamental concepts"individual risk"and"collective"and solves in a rigorous way the problem of how to analyze the information obtained from these sources to arrive at the"insurance premium". In practice, actuaries often only gain a few individuals risk information, but they can get a lot of collective policy information. Therefore, the theory of homogeneous of the concept of collective policy's role in the practical application is small, and the credibility theory has greater reliance on the concept of heterogeneous collective policy.Actuaries often need to establish experience rating system based on records of individual claim and records of collective claim. The Credibility model is a weighted estimator of assumption of homogeneous collective policy and assumption of heterogeneous collective policy. In recent years, many scholars improved the basic weighted estimator and gave theoretical proofs. This paper reviews several important results, including credibility estimator of exponential dispersion family, second order optimal statistics, semiparametric models and robust regression credibility.