Risk Loads for Insurers [Discussion]

I wrote this discussion to question the level of certainty conveyed in Feldblum's initial paper and to keep the topic open. Although Philbrick's comments help in this regard, he does not go far enough. I am concerned that inexperienced actuaries will see betas published in the Proceedings and will feel justified in rushing off to use these in setting profit loads, despite Feldblum's warning that his calculations were for illustration only. There are still many unresolved issues regarding the measurement of risk and its application to profit provisions. The research to date is encouraging and highly connected, as we shall see, but there is still much left to do. Keywords: Profit Factor, Rate of Return, Risk