Calculate risk classification differential changes, including balancing back.
Free SOA Exam ASTAM (Advanced Short-Term Actuarial Mathematics) lesson in Reserving and Pricing for Short-Term Insurance Coverages. 10 min read, ~1,540 words.
Class differentials (relativities) multiply a base rate to produce class rates. Changing any differential shifts total premium. Off-balance factor. It quantifies how much total premium moved at the old base rate. Balance back: divide the proposed base rate by so the overall rate change hits your target. Revenue-neutral: new base...
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Key Takeaways
- Exam Shortcuts
Learning objectives
- 6e
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