Retrospective Rating: 1997 Excess Loss Factors

The NCCI methodology for deriving Excess Loss Factors (ELF's), based largely on research performed in 1986, is documented in "Retrospective Rating: Excess Loss Factors" by William R. Gillam. This paper updates that 1991 paper. The changes in the way ELFs are produced have been significant, if not extensive. The work done to support those changes was extensive. In the Fall of 1992, after an intense but focused study, NCCI updated the parametric size-of-loss distributions described in Gillam's paper. The associated changes were in production for most 1993 filings. A much more in-depth review of the ELF model was completed in 1995. In this report, we detail some of the investigations made in that review and the features of the resulting model.