Implications of Sampling Theory for Package Policy Ratemaking, [Discussion]

This paper is another in a series of studies on the application of contemporary mathematical developments to the problems of the actuarial sciences both in terms of providing the theoretical justification for, and introducing new techniques into, actuarial practices. Specifically, this paper is concerned with the application of two techniques of sampling theory--stratification and ratio estimation--to (package) ratemaking. My remarks will be confined to a critique of the statistical theory involved, and I will leave the practical aspects of the implied ratemaking process for others to discuss. It might be observed in passing, though, that Mr. Lange has presented some persuasive arguments in favor of sampling theory in package ratemaking: the ability to incorporate more accurate trend, credibility, and loss development factors as well as to analyze the design of package policies, among others.