Credibility Calculator

Calculate Limited Fluctuation and Bühlmann credibility factors for actuarial ratemaking and reserving.

Claim Count (n)

Full Credibility Standard (n_full)

Prior (Manual) Mean (μ)

Observed Mean (X̄)

Expected Process Variance (EPV)

Variance of Hypothetical Means (VHM)

Tab to move between fields

Classical Credibility (Z)

0.304

Bühlmann Credibility (Z)

0.976

Bühlmann k (EPV/VHM)2.5

Credibility-Weighted Est.$5,488

Prior Weight2%

Data Weight98%

How to Use This Calculator

Enter the number of observed claims or exposure units (n).
Set the full-credibility standard (e.g., 1,082 claims for frequency at the 90/10 level).
Enter the prior (manual) mean and your observed mean from experience data.
Enter the Expected Process Variance (EPV) — the average within-risk variance.
Enter the Variance of Hypothetical Means (VHM) — the between-risk variance of true means.
Review the Bühlmann k parameter (EPV/VHM) and credibility factor Z = n/(n+k).
Use the credibility-weighted estimate: Z × observed + (1−Z) × prior.

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