An Analysis of Experience Rating, [Discussion]

This paper is another valuable contribution by Glenn Meyers to the actuarial literature [ 11. In it, the author analyzes many aspects of experience rating formulas. Mr. Meyers’s paper contains a remarkable amount of material. It can be divided into four parts, each of which would have been a useful paper on its own. His first two sections give an introduction to experience rating. His third section examines private passenger automobile merit rating data, illustrating a general result in credibility theory with important practical implications. Meyers’s fourth, fifth, and sixth sections examine commercial lines experience rating in terms of a useful general concept which Meyers has called efficiency. His seventh section gives a generally applicable method of applying statistical tests to choose the most appropriate form of an experience rating plan.