The American Academy of Actuaries defines credibility as a measure of the predictive value that the actuary attaches to a particular set of data in a given application. In currently common notation and terminology used for workers compensation experience rating, and denote primary and excess credibilities. This article shows for the first time that in NCCI’s Experience Rating Plan, the weight given to the reported primary loss ratio is where is the insured’s average D-ratio, and the weight given to the reported excess loss ratio is We use this viewpoint to show an underlying similarity between NCCI’s and California’s workers compensation experience rating plans, to explain recent state-level performance of NCCI’s Experience Rating Plan, and to discuss interstate mods across states with differing experience rating plans.
© Copyright 2022 National Council on Compensation Insurance, Inc., John P. Robertson, and Yuchen Su. All Rights Reserved.
© Copyright 2022 National Council on Compensation Insurance, Inc., John P. Robertson, and Yuchen Su. All Rights Reserved.
