Auto B. I. Liability Rates - Use of 10/20 Experience in the Establishment of Territorial Relatives. [Discussion]

Many times an actuary is confronted with a problem for which no exact solution exists or for which the cost, in either time or money, of obtaining an exact solution makes it prohibitive. In such cases we often have an idea of the range within which the exact solution lies or we know that we will take some positive action if the solution is within certain bounds. To assist in making the decision, a hypothesis is advanced and then tested for "reasonableness". This hypothesis must be skillfully formulated so that the solution we arrive at for our problem has the maximum probability of being the exact solution. In testing the hypothesis, rigorous mathematical proofs will be used and the best statistical or actuarial tools will be employed.