1. 

   Polina Hadjipanayiotou Member

   Hello everyone,
   
   how come the variance of the approximate normal distribution is 0.2* n*148.56^2 and not 0.2*n*148.56^2 - 0.2*n*109^2 ?
   
   Thanks

    

   Last edited by a moderator: Feb 26, 2018

   Polina Hadjipanayiotou, Feb 26, 2018

   #1
2. 

   Aditya mohan mathur Member

   Because the aggregate claims follow a compound Poisson distribution.
   Variance in this case is equal to product of Poisson parameter and the 2nd raw moment of the claim amount.

    

   Last edited by a moderator: Feb 26, 2018

   Aditya mohan mathur, Feb 26, 2018

   #2

   John Lee and Polina Hadjipanayiotou like this.

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