Explain how an organization puts new rates into practice, from rating algorithms and minimum premiums to non-pricing alternatives, in service of its goals.
Free CAS Exam 5 (Basic Ratemaking and Reserving) lesson in Ratemaking. 24 min read, ~3,619 words.
A rating algorithm is the ordered set of steps that combines base rate, rating variables, fees, and rules to produce a policy premium. Multiplicative algorithms multiply relativities against a base rate; additive algorithms add or subtract dollars; the variable premium scales with the risk while the flat (additive) premium does...
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What this lesson covers
- Content
- Example 1
- Example 2
- Example 3
- Example 4
- Example 5
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- A17
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