Commercial General Liability Ratemaking for Premises and Operations

Over the last several years, many changes have been made in ratemaking procedures for premises and operations. In this paper, these changes are described in the context of a complete premises and operations review. A detailed explanation of each step of the procedure, along with sample calculations, is provided. Special note is made of major changes that have taken place in the last 9 years, and reasons for these changes are discussed. The most significant changes discussed include the inclusion of package data, loss development by state, new credibility standards, and the minimum bias procedure for class group relativity calculations. As a conclusion, further changes that are being considered are briefly discussed.