Craig Anderson Vice President of Actuarial Services
The Association's fourteenth annual actuarial publication, the "1997 Minnesota Ratemaking Report," was mailed to the membership in September. The overall average change in pure premium base rates was a decrease of 14.8 percent. Various relationships among the more recent pure premium and manual rate levels are as follows:
As was customary in the 1984-1996 reports, the new pure premium base rates were derived excluding the following effects:
1. Eighth to ultimate report loss development, 2. Loss ratio trend indications to the midpoint of the experience period, 3. All taxes and assessments such as the Special Compensation Fund assessment, 4. Loss adjustment expenses, and 5. Other company operating expenses.
Carriers are reminded to consider these items when preparing their own individual rate schedules. Calculations demonstrating various alternative approaches to determine the effects of a number of these additional phenomena are provided for carrier information. In addition, an IBM-PC compatible data disk is included with each Report, complete with all class base rates and rating values to assist carriers in ratemaking mechanics.
1993-1997 Change in Pure Premium Base Rate Levels
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