Document Type : Original Research Paper
Authors
Department of Insurance Statistics, Shahid Beheshti University, Tehran, Iran
Abstract
Reliability theory is a statistical tool for calculating the insurance premium for the next period based on the insured's past experiences. Each contract is characterized by a risk parameter. In this article, we consider a risk parameter for each insured, and by using infinite mixed distributions, a model for calculating the reliability and Bayesian premium, based on the frequency and severity of damages, is examined together. The distribution of the total severity of damages based on frequency will be an infinite mixed distribution. Finally, by considering the prior gamma distribution for the risk parameter, the Bayesian and reliability premium is calculated.
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