The notes I reviewed for the NEAS, Feldblum states "premiums are trended
from the midpoint of the experience period to the midpoint of the future
policy period. This the general rule."
In reviewing the latest ISO filing for Commercial Auto Physical Damage,
the trend period is from the average date writing to six months beyond
the effective date for aggregate loss costs (exposure times current ISO
loss cost). The experience period is made up of three accident years.
ISO trends from the beginning of each AY????? I assume annual policies
and annual rate reviews.
In reviewing the latest ISO CGL filing, the trend period for aggregate
loss costs is from the average date of coverage (again using AY) to one
year beyond the effective date.
Graves and Castillio trend the PPMR to one year beyond the effective
date, assuming 1 year policies and rates will be in effect for 1 year
(page 641). They say this is the average date of exposure for polices
written with these rates. I assume this is the average earned date??
They make no mention of what date they are trending from in each policy
year in the experience period.
Homan trends the premium from the midpoint of the latest year to one
year beyond the effective date by the use of a premium projection
factor.
I used to think the trend period was from the average date of writing in
each experience period to the average date of writing in the effective
period. This would support the midpoint rule from NEAS. Any comments?