i have provided a excel file, where there are my results, i am missing some things in the project
Frequency analysis. Your first task is to analyze claim frequency by the rating variables availablefor your data. Analyze each variable separately, looking at frequency = claim counts / exposure.a) What are the frequency relativities for each variable?b) How does the outer product of these relativities compare to the empirical relativities forthese variables? You can obtain the empirical frequencies by creating a cross tabulationof the variables.c) Are there any low-volume cells that are candidates for being combined? What criteriacould you use to select these candidates?2. Severity analysis. In this section, you will look at the severity (Tot_Inc/Counts) for the ratingvariables. The format and questions are similar to the frequency analysis:a) Create tables of total loss, claim counts and severity for each variable.b) Convert both severity tables to relativities to their respective base classes. Whatstands out here
c)Create a cross tabulation of total loss, claim counts and severity by territory and rating class. What stands out here? Are there any combinations of the variables that are rare?
d) Convert the severity table you created in d) to a relativity table based on territory 4and rating class A. Create an alternative relativity table using the outer product ofrelativities from the tables in part c). The latter implicitly assumes that thesevariables are independent. How do these two tables compare? Does it appearappropriate to assume that these variables are independent?e) Comment on the differences between your conclusions on claim frequency andseverity. Is there justification for considering frequency and severity separately, ordoes one dimension appear to capture most of the differences in these classificationvariables?3. Pure premium analysis. In this section, you will analyze pure premium (Inc_loss/expos). Sinceyou have already looked at the components separately, you can go directly to the pure premiumtables.a) Create a table of pure premium for each rating variable. Convert them to a relativitytable. How do these relativities compare to the frequency and severity relativities forthe same variable?b) Create the cross tabulation of pure premium by territory and rating class. Convert this toa relativity table. How do these relativities compare to the frequency and severityrelativities?c) Create a pure premium relativity table from the product of the relativities in part 4a).What can you conclude about using separate multiplicative factors to predict purepremium?4. Minimum Bias Method. Since we don’t know the relativities currently used in the rating plan,the adjusted pure premium method cannot be applied directly. However, you could try usingthe estimated relativities for territory to compute the adjusted relativities for rating class, andvice versa.a) Try this method. Does it improve the results (in the sense of moving the estimates closerto the “true” values?)b) Chapter 9 of the Werner