INSURANCE ACTUARIAL · T459 cat-30

Insurance Ratemaking Adequacy Tester

Pure premium (exposure-based) ratemaking per the CAS Exam 5 study materials and the CAS Statement of Principles Regarding P&C Insurance Ratemaking. Computes the indicated rate change from historical exposure and loss data, applies credibility weighting (classical square-root, 1,082-claim full-credibility standard), and outputs a rate-adequacy conclusion suitable for supporting a regulatory rate filing.

🔒Zero PII
📡No server calls
💻Client-side
📋CAS Ratemaking Standards
Pure Premium Method Indicated Rate Change Credibility Permissible Loss Ratio CAS Exam 5 Rate Filing
🔒 All inputs are processed locally in your browser. No data is transmitted. Do not enter real personal data — use synthetic or anonymised inputs only.
A — Experience Data (by accident year)
Up to 10 accident years · leave a row blank or zero exposures to exclude it
Accident Year Earned Exposures Earned Premium ($) Incurred Losses + LAE ($) Reported Claim Count Current Rate Level Factor
Earned Premium is at as-written rates; the Current Rate Level Factor on-levels it to current rates (Step 1). Enter 1.0 if premium is already on-level. Claim counts drive the credibility weight.
B — Trend & Development
Severity + frequency combined annual loss trend
Mid-accident-year to mid-prospective-period for the latest year; earlier years get +1 yr each
Optional — exposure / average-premium drift
C — Expense & Profit Provisions
Commissions, premium tax, assessments
Salaries, overhead allocated per exposure unit
Target underwriting profit margin
D — Credibility
Square root and classical limited-fluctuation both use Z = √(n / n_full)
Default 1,082 = standard 90/10 (P=90%, k=10%) claim-count standard
The indication blended into the (1 − Z) portion
Rate change implied by the complement, e.g. 0% = "hold present rates"
1 — Year-by-Year Experience
2 — Indicated Change Summary
3 — Permissible Loss Ratio Decomposition
4 — Adequacy Assessment
5 — Sensitivity Analysis

Credibility-weighted indicated rate change under loss-trend shifts (rows) and permissible-LR shifts (columns). Base case highlighted.

6 — Caveats & Method Limitations
About This Tool
Disclaimer Indicative ratemaking calculation only. On-level factors and loss development to ultimate must be supplied by the user — this tool does not compute them. The indicated rate change is for reference; an actual rate filing requires appointed-actuary certification and jurisdiction-specific documentation. Not a substitute for actuarial sign-off.
CAS Statement of Principles Regarding Property and Casualty Insurance Ratemaking — the four principles and the definition of a reasonable rate (not excessive, inadequate, or unfairly discriminatory). [1] CAS SoP — Ratemaking
CAS Exam 5 / Friedland Werner & Modlin, "Basic Ratemaking"; Friedland, "Estimating Unpaid Claims Using Basic Techniques" — pure premium and loss-ratio indication methods. [1] CAS Exam 5 syllabus
Classical Credibility (90/10) Full-credibility standard of 1,082 expected claims for P=90%, k=10% under the classical limited-fluctuation framework; partial credibility Z = √(n / n_full). [2] Limited fluctuation credibility
Complement of Credibility The (1 − Z) weight is applied to a complement — present-rate change, prior indication, or external benchmark — per ASOP No. 25 and CAS credibility literature. [2] ASOP No. 25
On-Levelling Current-rate-level factors are supplied by the user (parallelogram method not computed here). See Note [3]. [3] On-level premium
Method Parameters
CREDIBILITY
Full-cred standard (claims)1,082
Partial credibilityZ = √(n/n_full)
PERMISSIBLE LOSS RATIO
PLR = 1 − VarExp% − Profit% − (FixedExp / AvgPrem)
INDICATED CHANGE
Δ = ActualLR / PermissibleLR − 1
Z·Δ + (1−Z)·Complement