Measures of Credibility

This project investigated new measures of credibility for Allmerica Financial, a Worcester based insurance company. The current credibility measure has not been updated in the recent past and a critical analysis was required to measure its validity. In particular, the method of predicting future claims was analyzed using three consecutive years of data from the recent past. The project incorporated several new ideas into modifying Allmerica’s current practices. These resulted in better predictions for Allmerica’s future claims values.