Classification/Territorial Ratemaking

Gardner, Brad ( (no email) )
Tue, 17 Feb 1998 17:54:50 -0700

McClenahan states- If the loss ratio method is used for
class/territorial ratemaking, the on-level earned premium for each
classification must be adjusted to the base classification level before
the experience loss ratios are calculated (page 63).

Does Finger make this same adjustment when the loss ratio method is
used? I know Finger uses base exposures for the pure premium method.
Same idea different method??????

Homan (Homeowners) uses the loss ratio method for territorial
indications yet I do not think he makes an adjustment to the premiums to
be on a base territorial level??? Should premiums be adjusted???

In the hurricane paper, a pure premium (loss costs) method is used for
territorial indications. Are base exposures used here???? Should base
exposures be used??

Please Help!

Brad