Managing Commercial Lines Pricing Levels in a （管理商业定价水平）.pdfVIP

Managing Commercial Lines Pricing Levels in a Loss Cost Environment Lisa A. Hays, FCAS, MAAA Managing Commercial Lines Pricing Levels in a Loss Cost Environment Lisa A. Hays, F.C.A.S., M.A.A.A. Abstract The Percent of Loss Cost statistic (PoLC) is an effective tool, either alone or in conjunction with standard renewal pricing reports, to measure changes in commercial lines price levels in a loss cost environment. This paper demonstrates the calculations and definitions associated with the PoLC statistic. A case study for workers compensation is presented which demonstrates a practical application of how PoLC can be used to segment a book of business when implementing indicated rate changes. Finally, sample reports are developed to monitor pricing results versus stated goals. [The opinions expressed by the author are solely her own and are not attributable to any organization with which the author has been affiliated. The author would like to thank Kevin Kelley, Kim Mullins, Mike Sullivan, and the CAS team of reviewers for their helpful comments on earlier drafts.] 10 Managing Commercial Lines Pricing Levels in a Loss Cost Environment One challenge facing todays commercial lines actuary is to accurately measure pricing changes in a book of business. In commercial lines, the actuary cannot simply file a base rate change and feel confident that the intended change will be the implemented change. Underwriters have many judgment rating tools at their disposal including access to multiple companies and schedule rating plans that enable them to match the pricing of a policy to its exposure, or to match the pricing of a policy to a competitors quote. Thus, the implemented rate change may not be equal to