View Full Version : 2008 #26

05-02-2011, 03:35 PM
The "trend from" date for calendar year 2006 earned premium, why is it not the "average written" date of the earned premium which is 1/1/2006, rather it is 7/1/2006?


05-02-2011, 04:03 PM
You want to be consistent when selecting trend dates for the 1-step premium trend method. So either:

1. Avg Earned Premium Date to Avg Earned Premium Date; or
2. Avg Written Premium Date to Avg Written Premium Date.

Using (1), from 7/1/06 to 1/1/2010 --> 3.5 years.
Using (2), from 1/1/06 to 7/1/2009 --> 3.5 years.

Page 85 of the W-M text talk about this briefly.

If this was a 2-step premium trend problem, then you will need to use the avg written premium date in the exposure period.