A bit unsure about something: Z=credibility factor L=profit loading A=book premium for group E=risk premium based on group’s experience Group premium = ZA + (1-Z)E + L 1. What actually is the book premium? Is it a standard table? Where does it come from? What is it based on? A definition would be great. 2. Is it the A or the E that reflects the specific profile of the scheme in terms of gender, age, occupation and industry etc. 3. I don’t understand statements I’ve previously read - such as “unit rates specific to a scheme are adjusted for the scheme’s profile”. Firstly, are unit rates another name for the final combined rate (per unit)? So is this just a general statement saying that the final combined rate accounts for the specific profile through a credibility blend? This is how I’m interpreting everything at the moment: - the book premium / rate is some sort of standard table based on similar schemes to the one being priced. - the book rate gets adjusted to reflect the scheme risk profile - the scheme’s actual experience is also factored in. The more credible it is, the higher the value of the credibility factor (and therefore the smaller the importance attached to adjusted standard tables) - the scheme’s actual experience is a burning cost adjusted for exposure in the next period, on-levelling and inflation. Have I got something wrong here?