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Old 03-30-2018, 12:34 PM
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Vorian Atreides Vorian Atreides is online now
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Quote:
Originally Posted by Heywood J View Post
What is the point of modeling claims with no payment? Whatever the frequency of them, wouldn't you have to multiply it by expected severity of zero when calculating the rate?
If you have a provision for ALAE and/or ULAE that is based on "claim count" (regardless of the size of indemnity payment, if any), then you'll need to capture that with a frequency model.

But agree that would need to also consider them in the severity model (with a zero indemnity potential).
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