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The number of claims received by an insurance company in a year is Poisson with = 19. The
claim amounts (severity) are independent of one another and are distributed lognormally with
parameters = 7.1034 and =1.4723. Define S to be the random variable for the total amount of
claims paid in a year. Find the pure premium (actuarially fair premium) and variance of total
claims in a year.

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The number of claims received by an insurance company in a year is Poi.pdf

  • 1. The number of claims received by an insurance company in a year is Poisson with = 19. The claim amounts (severity) are independent of one another and are distributed lognormally with parameters = 7.1034 and =1.4723. Define S to be the random variable for the total amount of claims paid in a year. Find the pure premium (actuarially fair premium) and variance of total claims in a year.