Semi-variance. This figure illustrates the measurement of semi-variance. Semi-variance only measures the variance of claims (SIj) above the average value of all claims (E(SjI)).
nj denotes the total number of claims for insurance risk j
The total number of claims is measured by nj, the individual retained claim
values are indicated by SIj , and the average value of all claims is denoted by E(SjI).
The variance of the retained claims accounts for both above and
below the mean variability, while semi-variance only accounts for the
variability above E(SjI)