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Premium Rating - April 2007 Q4

S

Student101

Member
The unprojected historical data is as at 31/12/07 and the annual policy incepts on 1 Jan - surely this means that we want to calculate the total claims cost in 1/7/08 monetary terms (ie the average claim will occur 6 months later)?

But by projecting the claims to ultimate and applying a whole year's inflation we are calculating the total claims cost as at 31/12/08. Shouldn't we be multiplying by 8 month's inflation rather than 12?
 
The unprojected data is as at 31/10/07, but still relates to each accident year. As long as you state your assumptions, you'll be ok.

For example, you could assume that "7% inflation in 2005" means that prices rose by 7% from mid-2004 to mid-2005.

This and other assumptions are all discussed in much more detail in ASET.
 
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