摘要：Currently, the pro rata method is widely used to price policy extensions and other changes to policy length. However, there are several other methods that an actuary can use in pricing policy-length changes, such as option and forward pricing, or modeling. There is little discussion in the literature about the relative merits of these different methods, leaving the pricing actuary potentially unsure of which method to use in a given situation. This paper seeks to resolve some of that ambiguity by identifying the features of a contract that would indicate the need to select a certain method over others. The goal of this discussion is to provide the pricing actuary with a framework that can be used to select the most appropriate method for the particular contract that is being priced. The paper then provides simple examples of how these methods might be applied in different situations. Finally, it compares the results obtained using the recommended method to the results from the pro rata method, and points out the potential for pricing insufficiencies when the pro rata method is applied universally. These results should encourage the reader to consider pricing techniques aside from the standard pro rata method.
关键词：Policy extension; pro rata; option; forward; simulation; multi-year; pricing.
