Pricing in General Insurance

8 Pricing in General Insurance

are considered more risky than others, if only because they are more expensive and there-

fore when they are damaged it costs more to repair them, and certain drivers are more

dangerous than others. One might therefore devise fancier ways to nd a general measure

of exposure. However, simple is often better, and there is often not enough evidence in the

data to justify doing something too clever.

In the case of employers’ liability, an exposure measure that is often used for burning

cost analysis is wageroll (the total amount of salary paid to the company’s employees).

Another good one is the number of employees ( ...