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Loss severity of claims amounts in motor insurance. A case study of State Insurance Company
(2016) Acquah, David
General Insurance companies in Ghana are confronted with problems when they want to use past or present claims amounts in forecasting future claim severity. This study seeks to determine an appropriate statistical distribution for the claims amounts of SIC, to determine the posterior distribution of the claims amounts of SIC, and to estimate the expected future claims amounts of SIC using Bayesian methodology. Secondary data from motor policy was obtained from State Insurance Company (SIC) over a period of one year (from January 2015 to December 2015) was used. Claims data that were above GHS 4,000 were considered by the researcher. The analysis of the data was done using Excel, Statistical Package for Social Science (SPSS) and EasyFit software. The research work revealed that the claims data and the posterior distribution of the claim amount followed log-normal distribution and the expected future claim amount is GHS 21,525.27.