Total loss distribution

  • Thread starter Thread starter confused man
  • Start date Start date
C

confused man

If I am working with two sets of data (Frequency & Severity)
and Frequency (for example) looks like this:
a 40%
b 42%
c 12%
d 6%

and Severity (for example) looked like this:
$1 15%
$2 45%
$3 25%
$4 15%

is their a function in Excel, that will allow me to quickly find all the
loss distribution possibilities? (a$1, a$2...ab$1...etc)

Thank you so much,
Confused man
 
Sure CLR, I'll try again...

Assume you have one set of data called number of accidents and it looks like
this...

# Accidents Probability
0 40%
1 25%
2 30%
3 5%

And then you have another set of data called possible dollar losses and that
one looks like this

$ Loss Probability
$ 1000 15%
$ 3000 30%
$ 13000 35%
$ 50000 20%

Now what I want to do is create a total loss distribution table. for example
what is the probability of having $1000 in losses, well that would be 1
accident @ 25% * $1000 @ 15% = 3.75%

Another example would be what is the probability of having $17000 of losses
that would be the probability of 3 accidents, times the probability of $1000
* probability of $3000 * probability of $13000
* 6 (this would be because their are six different ways to get this $17000
loss.

I hope this makes it cleareer. Thank you so much,

Confused Man
 
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