This session explores various advanced topics associated with casualty exposure rating. Traditional exposure rating techniques are not truly independent of a typical experience rating approach, since these techniques usually rely upon an Expected Loss Ratio estimate derived from that very same experience. Therefore, credibility weighting experience and exposure rating answers combines two figures which are not statistically independent of each other. Our three esteemed panelists will discuss the aforementioned as well as the pitfalls of using simplified or summarized exposure data when rating casualty business. Panelists will also explore the bias that may be produced when not considering important qualities of the underlying exposures such as layered policies, partial participation within layers, ventilation between layers, and heterogeneous data.
In addition there will be discussion on the challenges involved in exposure rating European motor excess of loss business. Major issues include the lack of industry ILF curves, quantifying the impact of indexation clauses, dealing with the extreme long tailed nature of this exposure in many countries, and assessing the impact of regulatory changes, such as those arising from the Fifth European Motor Directive.