Value Packs / Insurance / Premium Adequacy & Leakage Sentinel / Wisdom
Which programs are charging less per unit of risk than we intended this month, and how much premium does that cover?
NWhere we are charging less than we meant to
IN A NUTSHELL
Three programs are charging less per unit of risk than intended. Contractors GL is furthest — $3.41 per $1,000 of exposure against an intended $4.02, 15% under — on $174M of premium. Commercial Trucking is 42 cents under on $148M and Public Entity Package 19 cents under on $131M. Propane & Fuel Dealers and Municipal Law Enforcement are both charging above what was intended. Contractors GL is the widest gap of the five in percentage terms.
Rate per $1,000 of exposure against what we intended, by program, this month
Each program is read against its own intended rate — Propane is intended at $7.10 and Contractors GL at $4.02, so the cents are not comparable between programs.
Commercial Trucking is 42 cents under an intended $6.30, which is 6.7%. Contractors GL is 61 cents under an intended $4.02, which is more than twice that as a share of the rate.
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How has the average rate on Contractors GL moved month by month against what we intended?
NTen months on rate, then one that is not
IN A NUTSHELL
The rate sat inside its expected range every month from January to October, moving between $3.94 and $4.14. November is the first month below it — $3.41 against an intended $4.02. The fall from October to November is 57 cents, which is 14% of the rate, against a largest ordinary month-to-month move of 19 cents.
Rate per $1,000 of exposure against the range expected · Contractors GL
The range is rebuilt each month — a rate below the bottom of it is less than this month’s own history expected the program to charge.
The ten months to October sit either side of what was expected by at most 11 cents. November is 61 cents below — more than five times the furthest any earlier month strayed, and the only one outside the range.
Wisdom noticed
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Is the rate falling everywhere in the program, or in part of it?
NTwo states, and they are the two with the worst losses
IN A NUTSHELL
It is two states. Texas charges $2.84 per $1,000 against the intended $4.02 — 29% under — and carries 38% of the premium. Florida charges $3.12, 22% under, on 21% of it. Georgia is 1.5% under and everywhere else is 4.0% above what was intended. Texas and Florida are also the two worst loss ratios in the program at 118.6% and 109.2%, against 88.1% everywhere else.
Rate, loss ratio and share of premium by state · Contractors GL
| Where it is written | Rate per $1,000 | Against what we intended | Loss ratio | Share of the premium |
|---|---|---|---|---|
| Texas | $2.84 | −29.4% | 118.6% | 38% |
| Florida | $3.12 | −22.4% | 109.2% | 21% |
| Georgia | $3.96 | −1.5% | 92.4% | 17% |
| Everywhere else | $4.18 | +4.0% | 88.1% | 24% |
The four rows cover the whole program — weighted by share of premium they come back to the $3.41 average on the previous chart.
Texas and Florida are 59% of the premium in this program. They are the only two states charging materially below what was intended, and the only two with a loss ratio above 100%.
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Put the monthly pricing report together.
NThe report lists every program and state charging less per unit of risk than it was meant to, with the exposure written there, the rate being charged, the rate intended and the loss ratio behind it. One row per program and state.
rate_against_intended_november.xlsx
One row per program and state, sorted by the gap to the intended rate. Five programs, with the eleven months of rate history behind each.
47 KB · 78 rows · 5 programs · 11 months
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