ACTS4311 - Theory of Credibility

ACTS 4311 Theory of Credibility (3 semester credit hours) This 3 semester credit hour course provides a solid introduction to credibility theory as a set of quantitative tools that allows an insurer to perform prospective experience ratings (adjust future premiums based on past experience) on a risk or group of risks. Students will learn how to resolve the problem of combining information from two samples, one of which is small but very relevant, the other is large but less relevant. Different approaches such as limited fluctuation or classical credibility, Bayesian, Bhlmann, and Bhlmann-Straub credibility will be studied and applied in practical settings. This class covers parts of the SOA exams FAM-S (Fundamentals of Actuarial Mathematics - Statistics), ASTAM (Advanced Short Term Actuarial Mathematics), as well as CAS exam MAS II (Modern Actuarial Statistics II). Prerequisite: ACTS 4304 with a grade C- or higher. (3-0) Y