Past exam of the mathematics course of the University of Cambridge 2013 iii Paper 28 4 b iii Solution Created 2026-10-03 Updated 2026-10-07
With a new count , the updated Bühlmann credibility estimate is . Subtracting the previous estimate gives the sequential Bühlmann credibility updateTherefore the new estimate is strictly smaller exactly whenBecause a claim count is a nonnegative integer, the equivalent set is . A count equal to the previous estimate leaves it unchanged; a larger count increases it. The comparison is with the previous credibility estimate, which already combines the prior population mean and the observed mean.