I'm near positive this has been asked somewhere before, but I can't find the right search term to bring it up.
What is meant by the 3rd criterion for credibility (the percentage charge for any loss decreases in E)? I understand how to verify if the criteria is met as you just divide the credibility formula by E and take the derivative with respect to E. The part I'm stuck on is how this accomplishes a proof of what we desire.
What is meant by the 3rd criterion for credibility (the percentage charge for any loss decreases in E)? I understand how to verify if the criteria is met as you just divide the credibility formula by E and take the derivative with respect to E. The part I'm stuck on is how this accomplishes a proof of what we desire.
Credibility Criteria
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