Overview
The object of Insurance Portfolio analysis is to determine a distribution for the total dollar amount of claims over a given time period, labeled S.
Topics
As with most statistical analysis, there are multiple ways to arrive at a distribution for total claim amount.
- Individual Model - takes {% n %} as the total number of policies, and models a claim amount for each policy over the time period, and then just adds. (Claim amounts can be zero)
- Collective Model - the collective model takes {% N %} to be a random variable specifying the number of claims in the time period arising from the portfolio. Then it models the claim amount for each claim.