The third-party motor insurance data from Sweden for 1977 described by Andrews and Herzberg in 1985 contain average claim occurrence rate (P c ) , size (C a category of vehicles specified the kilometres travelled per year (K), geographical zone (Z), no claims bonus (B) make car (M). categorical variables Z M may first be represented respectively vectors (Z 1 2 … 6 (M 8 binary variables. variabl...