Abstract
In performing Bayesian analysis of a bonus–malus system (BMS) it is normal to choose a parametric structure, π 0( λ), in the insurer’s portfolio. According to Bayesian sensitivity analysis the structure function can be modelled by specifying a class Γ of priors instead of a single prior. In this paper, we examine the ranges of the relativities, i.e. δ π= E[λπ(λ| data)]/ E[λπ(λ)] , π∈ Γ. We illustrate our method with data from [Astin Bulletin 10 (3) (1979) 274].
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