Implications of Sales as an Exposure Base for Products Liability [Discussion]

Mr. Philbrick's paper on sales as an exposure base for products liability represents a significant contribution to the "Proceedings" as a quantification of what heretofore had been held as a relatively subjective underwriting criterion. I found his presentation particularly interesting in the manner in which he demonstrated the problem with an illustrative example. While some readers may have felt the initial assumptions were oversimplified, I would disagree. Before a problem can be solved, it must be identified. All too often authors proceed immediately into a case study involving a number of complexities which tend to obscure the characteristics of the variable under investigation. The initial portion of this paper could be used by any number of underwriters, risk managers or interested insureds as a primer on the analysis of the amount of products that are currently in the stream of commerce. The remaining portion of the paper is well suited to the actuary or student who wishes to go beyond the initial assumptions and test the sensitivity of the various factors in the author's model. From a pedagogical point of view, I think the gradual introduction of complicating variables allows the reader to appreciate the role each concept plays in the total picture. Products Liability, Premium Analysis, Exposure Bases