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. 12 min read, ~1,777 words.
Class differentials (relativities) multiply a base rate to produce class rates; changing any differential shifts total premium. Off-balance factor quantifies how much total premium moved at the old base rate. Balance back divides the proposed base by: revenue-neutral new base = old base /; targeted new base = old base...
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- 6e
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