Abstract
With current methodology, the parameters of a retrospective rating plan are calculated to place the plan in balance on an underwriting basis. This paper provides a way of calculating the present value of the retrospective premium. Using this methodology, one can compare the expected profitability of various retrospective rating plans on a discounted or operating basis. This includes paid loss retros. It is also possible to determine the parameters of a plan that will yield a predetermined operating profit.
Keywords: Claim Size Modeling, Loss Distribution
Volume
LXXIII
Page
113-128
Year
1986
Categories
Actuarial Applications and Methodologies
Reserving
Loss Sensitive Features
Retrospective Premium Reserves
Actuarial Applications and Methodologies
Ratemaking
Retrospective Rating
Financial and Statistical Methods
Loss Distributions
Publications
Proceedings of the Casualty Actuarial Society
