A.6. Couret and Venter

Question 1

Couret & Venter’s main insight

Answer 1

Couret & Venter observe that the physical circumstances underlying various injury types are correlated, and they use those correlations to gain additional information in estimating credibility weighted claim frequencies by injury type.

Question 2

How Couret & Venter’s use of injury type compares to Robertson

Answer 2

The NCCI estimates excess ratios for each injury type separately, and does not use information about correlations between injury types.

Question 3

3 methods for estimating injury type ratios for a class

Answer 3

1. The hazard group injury type ratios (i.e., V_h )
2. The raw sample data injury type ratios (i.e., V_i)
3. The injury type ratios resulting from the credibility procedure (i.e., v_i^est)

Question 4

Describing a holdout sample and why it is used

Answer 4

A Holdout Sample is used to test the predictive ability of a model built on data excluding the holdout sample data. If the model does not do a good job of predicting the holdout sample results, it is likely that the model has been overfit to the sample data used in building the model (or that the model has poor predictive power in general).

Question 5

Two unbiased options for producing a holdout sample

Answer 5

1. Split data by even and odd years
2. Split risks randomly into the modeling dataset and the holdout dataset

Question 6

Reasons Couret & Venter give why initial SSE test didn’t show much improvement for their procedure

Answer 6

1. Estimators derived from even years data are designed to fit that data
2. Class data by year is volatile