NPV in the ERD Formula
May I know what this NPV means?
Shouldn't the Sev be calculated as (Ceded Loss - RI Prem)/(RI Prem)? Thanks
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May I know what this NPV means?
Shouldn't the Sev be calculated as (Ceded Loss - RI Prem)/(RI Prem)? Thanks
Comments
NPV = Net Present Value
This is how severity is defined in the source . Appendix A page 1