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Rate Level vs. Premium Level Change

Explanation of the difference between rate level change and premium level change.;

The rate level change is the change arising from an actual adjustment to the manual rates.
 
A premium level change is the additional premium generated through any of a number of different means. For instance, total premium level will change by changing the table of premium discounts or the expense constant. Neither of these affect the manual rates, but they will affect the amount of premium paid by policyholders in a state.
 
Of course changing the manual rates will result in both a rate level change and a premium level change.

Premium & Rate Level Changes
 
Year
Premium Change
Rate Change
%
Factor
%
Factor
1/1/1990
23.3%
1.233
1/1/1991
4.9%
1.049
1/1/1992
13.4%
1.134
1/1/1993
7.8%
1.078
1/1/1994
2.8%
1.028
1/1/1995
-3.4%
0.966
-3.4%
0.966
1/1/1996
-5.9%
0.941
-8.6%
0.914
1/1/1997
-9.2%
0.908
-9.3%
0.907
7/1/1997
5.6%
1.056
5.6%
1.056
1/1/1998
-4.2%
0.958
-4.2%
0.958
1/1/1999
-2.5%
0.975
-2.5%
0.975
7/1/1999
2.7%
1.027
2.7%
1.027
1990's
subtotal
35.9%
1.359
-18.9%
0.811
1/1/2000
0.1%
1.001
0.0%
1.000
7/1/2000
3.6%
1.036
3.6%
1.036
1/1/2001
1.5%
1.015
1.5%
1.015
1/1/2002
-7.4%
0.926
-7.4%
0.926
1/1/2003
-1.9%
0.981
-2.2%
0.978
1/1/2004
-1.8%
0.982
-1.8%
0.982
1/1/2005
3.2%
1.032
3.2%
1.032
1/1/2006
2.2%
1.022
1.9%
1.019
1/1/2007
-3.1%
0.969
-3.1%
0.969
1/1/2008
0.4%
1.004
0.4%
1.004
1/1/2009
-3.4%
0.966
-3.4%
0.966
1/1/2010
-1.7%
0.983
-1.7%
0.983
1/1/2011
+1.7%
1.017
+1.7%
1.017
1/1/2012
+2.3%
1.023
+2.6%
1.026
1/1/2013
+5.0%
1.050
+5.0%
1.050
1/1/2014
-7.7%
0.923
-7.7%
0.923
 
1/1/2015
-3.7%
0.963
-3.7%
0.963
1/1/2016
+1.9%
1.019
+2.5%
1.025
 
1/1/2017
-9.3%
.907
-9.3%
.907
2000's
subtotal
-17.9%
0.821
-17.7%
0.823
26 years
TOTAL
11.6%
1.12
 source: ICRB rate filings
Note: totals calculated in multiplicative manner
Premium Level changes analysis:
1990's: 1.233 x 1.049 x 1.134 x 1.078 x 1.028 x 0.966 x 0.941 x
0.908 x 1.056 x 0.958 x 0.975 x 1.027 = 1.359
2000's: 1.001 x 1.036 x 1.015 x 0.926 x 0.981 x 0.982 x 1.032 x
1.022 x 0.969 x 1.004 x 0.966 x 0.983 x 1.017 x 1.023 x 1.050 x .923 x .963 x 1.019 x .907= 0.821
 

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The material in this document has been prepared and shared for informational purposes only and should not be relied upon as legal advice on any particular situation.