Homeowners Premium Trend

This paper reviews the Homeowners insurance process, concentrating on the forces that influence changes in loss exposures, Coverage A limits of liability, and insurance-to-value levels of individual exposures at renewal and books of business in the aggregate. These forces, or "influence," are categorized and discussed in terms of their implications on ratemaking methodology, particularly on premium trend. The primary purpose of this paper is to outline an alternative to the traditional premium trend method. The traditional and alternative methods, which assume static book of business, are compared to a "dynamic" approach which explicitly reflects the changes in a Homeowners book. Premium Analysis, Homeowners