Why should we look beyond traditional bonus-malus schemes?
https://www.actuaries.digital/2021/12/21/why-should-we-look-beyond-traditional-bonus-malus-schemes/
WEBDec 21, 2021 · In the traditional framework for BMS, a policyholder’s rating class immediately improves by one level after a single claim-free year but worsens by h levels for every claim made, and this is commonly known as the -1/ + h transition rule. In the modified system, an additional penalty component ‘pen ‘ is added to the mix.
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