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3 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Steps for a rate neutral capped territory relativity change using the Loss Ratio Method. |
1. Current premium by territory 2. Losses by territory 3. LR by territory 4. RLR by territory (Ind. Rel. Change) 5. Indicated Relativity 6. Apply caps (premium with relativity, x, capped = current premium) |
RLR, than equal premiums with capped relativity |
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Formula for rate change percentage if permissible LR is 65%, Territory A is capped at 20%, and premium and LRs are given? |
0.65 = (prem A * LR A + prem B * LR B ) / (prem A * 1.20 + prem B * x) |
What's the formula for the permissible loss ratio using premium and losses? |
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For territory changes with territory A capped at 20%, what is the multiplicative percentage for territory B for the shortfall? |
Prem A * (indicated change A - 1.20) / (prem B * indicated change B) |
What is A's shortfall as a percentage of B's indicated premium? |
