"For policies that provide 6 months’ cover, you have carried out an analysis of claims for accidents in the period 1 June 2016 to 30 November 2017. You plan to set new premium rates to apply for the period from 1 December 2018 to 1 August 2019. Determine the number of years for which you will need to project claims inflation." Can you please explain using example or diagrammatically, how we are determining the projection period as 2 years 4 month.
The average date of claim for the base period is the end of February 2017. The average policy inception date under the new rates is the end of March 2019, and the average claim under these new rates will occur three months into this average policy, at the end of June 2019. So the difference between the end of Feb 2017 and the end of June 2019 is 2 years 4 months.
