Hurlimann

Question 1

One advantage of using collective method vs. traditional BF

Answer 1

Actuaries always come to the same results given that they used the same premium (since the expected value of burning cost is based on actual data and premium, so everyone is using the same approach with the same assumption

Question 2

Advantage of the optimal credibility weight reserve

Answer 2

Minimizes MSE and variance of the loss reserve estimate
(Note: the MSE from Benktander and Neuhaus are close to the optimal credibility MSE)