摘要：Motivation. Calculated rate changes can substantially affect loss ratio forecasts and thus are critical
parameters for ratemaking. However, current methods are not well suited to a changing book of business.
Method. The analysis first explores the conceptual underpinnings of rate change and then applies the
conclusions of this analysis to several practical problems.
Results. The proposed approach shows improved accuracy as compared to other methods, with particular
significance for a nonstatic book of business.
Conclusions. I conclude that ¡°rate change¡± measures the change in premium relative to loss potential. One
can then apply this conceptual formulation in order to solve several problems that one confronts in
practice: how to adjust for shifts in limits and deductibles, how to blend together changes in exposures
when the portfolio uses several different exposure bases, and how to properly weight together granular
measures of rate change (e.g., for each policy, subline, etc.) into an overall rate change for the entire
portfolio.
Availability. Please contact the author at neil.bodoff@willis.com or neil_bodoff@yahoo.com
