Hi,
I was hoping someone could clear up some confusion I am having with reviewable IP contracts in chapter 1. The core reading emphasises in respect of these contracts, that premium can be adjusted in light of claims experience being different than expected. However, it makes no reference to premiums increasing at each review as age and in turn the expected cost of claim increasing.
In my company, premiums are generally increased at review to cover up until the next review period, in light of how the expected cost of claim increases with age... Am I correct in saying the core reading here is describing a different type of situation, where the insurer sets a premium which they hope to be able to keep level over the contract term (i.e to not increase with age specifically) but only to increase/decrease premiums in light of emerging claims experience?
Thanks for any help that can be offered, this has caused me great confusion!
Last edited by a moderator: Jan 10, 2022