Werner Ch 8

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  1. Pure Premium Method´╗┐
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  2. Loss Ratio Method
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  3. Loss Ratio versus Pure Premium Methods
    • LR method relies on loss ratio: Requires premium at current rate level; If difficult or not available, PP approach is preferred
    • PP method uses pure premium: Requires clearly defi ned exposures; If not available, LR approach is preferred
    • LR method produces indicated change to current rates
    • PP produces an indicated rate: PP must be used with new line where there are no current rates to adjust
Card Set
Werner Ch 8
Exam 5 TIA Werner ch 8
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