Interval Estimation of the Credibility Factor

In this article, we present a Bayesian approach for calculating the credibility factor. Unlike existing methods, a Bayesian approach provides the decision maker with a useful credible interval based on the posterior distribution and the posterior summary statistics of the credibility factor, while most credibility models only provide a point estimate. A simulated example is used to demonstrate the advantages and disadvantages of the Bayesian credibility factor proposed in this article.