Identify Rate Factors Driving a Change
Scenario: The Premium Displacement report is showing a larger or smaller change than expected from the rate assumptions, or the displacement is larger than the rate change applied should produce and the rate table appears to be correctly configured.
Goal: Use the Rate Comparison report to validate the rate adjustments, identify whether an unintended modification or a factor interaction is producing the unexpected displacement, and pinpoint which rate table changes are driving the outcome.
Prerequisites
- A scenario with a status of Executed or Partial Executed.
- The Premium Displacement report has already been reviewed and a discrepancy identified. Refer to Read a Premium Displacement Report to know more.
Step 1 - Open the Rate Comparison Report
- From the scenario's reports, select the Rate Comparison report.
- The report displays a factor-level side-by-side comparison of the Current and Proposed rate structures, making it possible to see exactly what changed and by how much.
Step 2 - Verify the Rate Adjustments Were Applied as Intended
- Locate the rate table modified in the scenario and confirm the values in the Proposed column reflect the adjustment applied.
- For a +5% bulk adjustment, every cell in the Proposed column should be 5% higher than the corresponding Current value.
- For inline edits, confirm only the specific cells changed show a difference.
- Check all other tables - any table not intended to be modified should show no difference between Current and Proposed.
If a table that was not intended to be modified shows differences, this is likely the source of the excess displacement. Go back to the scenario configuration, reset the affected table, and re-run. Refer to Edit and Re-Run a Scenario to know more.
Step 3 - Identify the Factors With the Largest Changes
- Scan the report for the rate factors with the largest absolute or percentage difference between Current and Proposed.
- Confirm these are the tables that were intentionally modified.
- If unexpected factors show large changes, check whether they are derived from or interact with the tables that were modified - some rating factors are calculated relative to others, which can amplify the impact of a change in a base table.
Step 4 - Cross-Reference With the Segment Analysis
- Compare the factor-level changes in the Rate Comparison report against the segment-level results in the Segment Analysis report.
- The factors with the largest changes should correspond to the segments with the largest displacement. If a factor shows a large change but the corresponding segment does not show elevated displacement, or vice versa, there may be a data or configuration issue.
- If the two reports do not reconcile as expected, contact the administrator with the specific discrepancy identified.
Step 5 - Export the Report
Click Export within the Rate Comparison report and save the file.
The Rate Comparison report is useful for actuarial review and for demonstrating to regulators that the rate modifications were applied as intended.
Next Steps
| Finding | Action |
|---|---|
| An unintended table modification is causing the excess displacement | Reset the affected table and re-run. Refer to Edit and Re-Run a Scenario |
| A factor interaction is amplifying the impact | Review the rate structure with the administrator before proceeding |
| Rate adjustments are correct and the displacement reconciles with the segment analysis | Results are validated. Proceed to filing preparation. |
| The two reports do not reconcile | Contact the administrator with the specific discrepancy |
Having trouble? Refer to our FAQs or Troubleshooting guide to know more.