Chapter 9: Establishing the Price: Rating Factors Flashcards
What is operational data?
Day to day information of how the underwriting is done
What is data for underwriting managers?
Require info specific to their line of business
What is board level data?
Directors look at group performance, cat reinsurance, and broad strategy
Define ‘claims information’
Information about the number and nature of claims
What is the personal injury discount rate?
The rate personal injury claims are discounted by, because it is assumed they will invest the money and it will accrue interest. Frrom 2019 it has been -0.25%
Define ‘frequency’
How frequently claims happen
Define ‘severity’
How serious are the claims
Define ‘claims loss ratio’
(claims incurred/premium) * 100
Define ‘earned loss ratio’
(claims incurred/premium earned in that year)*100
Define ‘outstanding loss ratio’
Claims that have been reported but not been settled- claims are compared to booked premium
Define ‘policy year’
Tracking based around when an individual policy incepts- suitable for looking at its performance individually
Define ‘underwriting year’
The year the polciy was written- suitable for tracking a group of policies
Define ‘calendar year’
Claims are allocated to the relevant year of loss
Define ‘accounting year’
Period depends on the financial year, and estimates are incorporated
Earned loss ratio is adjusted at what level?
Account level
