Bayesian credibility
= Bayesian credibility
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Bayesian credibility estimates a risk's conditional mean by its <Bayesian posterior> expected value under <squared-error loss>. When that posterior mean is an affine combination of exposure-weighted individual experience and a prior mean, the coefficient of the experience is its <credibility factor>. Exact Bayesian credibility is distinct from merely selecting the best affine estimator when the true posterior mean is nonlinear.