There are two (basic) methods for determining the price of an insurance product: The Loss Ratio Method and the Pure Premium Method. In this video, I’ll be discussing how the latter is derived from the Fundamental Insurance Equation.
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There are two (basic) methods for determining the price of an insurance product: The Loss Ratio Method and the Pure Premium Method. In this video, I’ll be discussing how the latter is derived from the Fundamental Insurance Equation.
source
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