Basic Ratemaking

This text outlines basic property/casualty insurance ratemaking concepts and techniques. It is intended to be a single educational text to prepare actuarial candidates practicing around the world for basic ratemaking. A key concept in the text is the fundamental insurance equation, which balances the expected future income and outgo of an insurance operation. Various chapters discuss the individual components of the equation (e.g., premium, loss, expense, profit), and other chapters review how to assess whether the equation is in balance in the aggregate and by customer segment. The text focuses on quantitative analysis as well as practical considerations in the ratemaking process. Finally, the text provides consistent definitions of terms and examples that underlie the ratemaking techniques discussed.