The Competitive Market Equilibrium Risk Load Formula for Catastrophe Ratemaking by Glen G. Meyers, Nov. 1991 - Discussion

Glenn Meyers has made a valuable contribution to actuarial literature with his well-written paper on how to load increased limits factors (ILFs) for risk. Given the complexity of the topic, he deserves special commendation for his coherent presentation. Meyers clearly states his fundamental assumptions and provides sufficient background for the reader to understand his results in context. His skill in composing mathematical derivations is also noteworthy. As to substance, Meyers uses the intuitively appealing market paradigm as the foundation for his risk load theory. This represents a conceptual step forward. Unfortunately, Meyers does not carry the theory far enough, and, in my opinion, ends up with an incorrect answer.