7.5 Method 4) Credibility Weighting Techniques / Bornhuetter-Ferguson

Credibility weighting between Method 1 and Method 3

\[\begin{equation} L = Z \times ({^{XS}Loss}_t^L \cdot {^{XS}LDF}_t^{L}) + (1 - Z) \times E \tag{7.5} \end{equation}\]

• If \(Z = \frac{1}{^{XS}LDF_t^L}\) then we have the BF method

• \(E\) is from method 1