Past exam of the mathematics course of the University of Cambridge / 2013 / iii / Paper 28 / 4 / b / i

Conditional on $\lambda$, a Poisson distribution has both conditional expectation and conditional variance equal to $\lambda$. For the uniform distribution on $(1,3)$,Thus $K=v/a=6$ and the one-year credibility factor is $Z_1=1/7$. With the observed count equal to one, the Bühlmann credibility estimate of the next year's conditional claim expected value isThe estimate gives relatively little weight to one year because the expected process variance is six times the variance of hypothetical means.