We always determine rates for a future period, and we generally assume that
future period is one policy year, hence, the "trend to" date is the average
accident date (or average date of exposure to loss) of the policy year, which is
one year after the effective date of the rates (assuming the rates are in effect
one year and the policies have one year terms).
Carolyn
Kathryn Herzog <busdriver@pop.ne.mediaone.net> on 02/04/99 02:18:22 PM
Please respond to busdriver <busdriver@mediaone.net>
To: "John.Celidonio" <John.Celidonio@reliancenational.com>
cc: studygroup6 <studygroup6@lists.casact.org> (bcc: Carolyn
Pasquino/MCIG/USA/Zurich)
Subject: Re: Brockmeier Trend
Homeowners premiums are Calendar Year not Policy Year, in which case, the
average
date of writing is 6 months after the effective date.
John.Celidonio@reliancenational.com wrote:
> The assumption is that the rates will apply to all policies incepting in a
> particular calendar year (i.e. a policy year). The last policy written
during
> this period will not expire until two years after the first inception date.
> Given the average accident date of an individual policy is in the middle of
> their effective period, the average accident date is therefore one year after
> the first inception date.