Introduction To Ratemaking And Loss Reserving For Property And Casualty Insurance Link

Ratemaking uses historical loss data. But that historical data comes from prior reserves .

The Actuarial Foundation: Introduction to Ratemaking and Loss Reserving Ratemaking uses historical loss data

These two functions are often siloed but must align. A mismatch causes financial disaster. 000 = 1.80

From 12 to 24 months: For 2020, 1,800/1,000 = 1.80; 2021: 1,900/1,100 = 1.73; 2022: 2,000/1,200 = 1.67. Average factor = ~1.73. 100 = 1.73

Rates must be high enough to pay all claims and expenses. Fairness: Rates should not be unfairly discriminatory.