Price Monitoring

[Morrison]

I am in a situation where I need to figure out just how much my rates have changed for certain policies.

The premiums, insured value, cat exposure, deductibles, etc... have all changed and I'm trying to model exactly how much the underlying rate has changed after taking into account all these changes. Can anybody point me to some syllabus readings that cover this in detail?

Thanks

[Franchise]

Don't know about syllabus readings, but it would seem to be somewhat straightforward to look at policies that were on the books before and after the changes, then alter the characteristics of the current policies to match the characteristics they had prior. Then, just rerate them all assuming they still had these characteristics. You could also do it backwards and rate the prior policies assuming they had current characteristics, but it might not be as easy to rerate them on a rate plan that isn't current.

[Morrison]

If I have more than one exposure base for different parts of the policy, will this mean I need to show more than one rate change (the desired end result is a % change). I think I'm getting mixed results due to more than one exposure base for each risk.

[Franchise]

If one part of your policy has the dominant exposure, the rate change there will certainly override the rate changes occurring for the other exposures. It depends on what you're trying to show. If you're looking for a total policy effect, I'd quote the total percent change. If you're looking for effects for each piece of the policy, then quote those. However, if you're looking for effects that fine, you could probably just compare the rate plans for effects by segment instead of rerating policies.