Insurance Rates With Minimum Bias [Discussion]

Mr. Bailey's latest paper is, indeed, a timely contribution to the proceedings of our Society. Timely, not only because it provides a method of calculating rates with minimum bias, but also because it provides ideal computer application. Without the aid of a computer the method is, in fact, impractical. The technique presented in the paper bears careful study by every ratemaker who has the task of calculating territorial or class differentials, and what ratemaker doesn't? Mr. Bailey's technique is designed to calculate the differentials which provide the best "fit" of the data. He solves for each of the various differentials by setting what he defines as the average difference equal to zero, then, by successive approximation he arrives at the set which provides the best fit.