Werner Ch 8

Pure Premium Method
Loss Ratio Method
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 defined 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

Author

Esaie

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Card Set

Werner Ch 8

Description

Exam 5 TIA Werner ch 8

Updated

2010-04-12T19:38:37Z

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