Insurers' Maximum Sustainable Benefit For Avoiding Losses, , are the highest portions of premium dollars they can provide, as benefits, throughout the year, while matching 's probability (0.9772) of avoiding operating losses. To adjust for their differences in PLRE variability, = 0.8500 - 2 * because PLREs above 0.8500 produce operating losses. Table 1 Row 13, shows that = 0.8443; = 0.8184; and = 0.7500. = 0.5338 and because is ten times larger than , is less than 0.0000 (0.8500 - 2 * 0.5000), because 's probability of losses (0.4207) is much higher than PI's (0.0228).
Insurers' Maximum Average Benefits Per Policyholder To Avoid Operating Losses are the highest benefits, in dollars, ( = * $4,000) insurers can pay, while matching 's probability (0.9772) of avoiding operating losses. Table 1 Row 14, lists these benefits. = $3,377, = $3,274 and = $3,000. = $2,135 and $0.00.
Matching 's ability to earn profits is easier than matching 's ability to avoid losses, because the more loss smaller insurers are, the more they need to cut benefits, to match 's probability of avoiding losses. ', 's and 's probabilities of earning profits, or incurring losses, are similar near the PLR, but rapidly diverge above the PLR, making it increasingly more difficult to match 's performance.