Skip to main content

Read a Premium Displacement Report

Scenario: A scenario has executed and the Premium Displacement report is open showing three premium figures - Charged, Current, and Proposed - but it is not clear how to interpret them, or the Charged and Current gap is unexpectedly large.

Goal: Understand what the Premium Displacement report is telling you, determine whether the Charged vs Current gap is a problem that needs investigation, and confirm whether the Proposed premium figures can be relied upon.

Prerequisites​

Step 1 - Open the Report​

  1. Locate the scenario in the dashboard or Scenarios view.
  2. Click Report in the Actions column and select the Premium Displacement report.

Step 2 - Understand the Three Premium States​

The report compares premium across three states. Read them in this order:

Premium StateWhat It RepresentsWhat to Look For
Charged PremiumWhat policyholders are currently paying under their existing policy termsThe baseline - what is actually in the market today
Current PremiumWhat policyholders would pay if re-rated today under the current rate structure, with no changes appliedThe re-rated baseline - what the current rates produce
Proposed PremiumWhat policyholders would pay under the rate changes configured in the scenarioThe outcome of the rate change

Step 3 - Interpret the Charged vs Current Gap​

The gap between Charged and Current is the most important thing to assess before drawing conclusions from the Proposed figures.

  1. Compare Charged Premium and Current Premium.
  2. A small gap is normal - it reflects minor differences between what is being charged and what the current rate structure produces.
  3. A large gap requires investigation before proceeding.

Common reasons for a large Charged vs Current gap:

ReasonWhat It Means
The product has not been re-rated recentlyThe current rate structure has moved away from the rates being charged - this is expected in some cases
Rate tables have been updated but policies have not yet renewedThe gap will close over time as policies renew under the new rates
A data or configuration issueThe rate tables may not be correctly aligned with the policy data - contact the administrator if this is suspected

If the gap is large and the reason is not clear, contact the administrator before using the Proposed premium figures. The displacement calculation may be misleading if the Current baseline is not representative of actual market rates.

Step 4 - Interpret the Current vs Proposed Gap​

  1. Compare Current Premium and Proposed Premium.
  2. This gap is the premium displacement - the net financial effect of the rate change.
  3. Check whether the displacement is consistent with what the rate change should theoretically produce. A 5% base rate increase should produce approximately 5% premium displacement across the portfolio.

If the displacement looks significantly higher or lower than expected, open the Rate Comparison report to verify the rate adjustments were applied correctly. Refer to Identify Rate Factors Driving a Change to know more.

Step 5 - Check the Distribution of the Change​

  1. Note whether the displacement is evenly distributed or concentrated in specific segments.
  2. For a detailed segment-level view, open the Segment Analysis report. Refer to Identify Affected Segments to know more.

Step 6 - Export the Report​

Click Export within the report and save the file.

The Premium Displacement report is typically the primary output included in actuarial review packages and rate filing submissions. Export it before moving to other reports.

Next Steps​

What You Want to DoWhere to Go
Understand which segments are driving the displacementIdentify Affected Segments
Verify the rate adjustments were applied correctlyIdentify Rate Factors Driving a Change
Understand the policyholder-level impactOpen the Winner / Loser report from the same scenario
Compare this result against an alternative proposalCompare Two Rate Change Proposals

Having trouble? Refer to our FAQs or Troubleshooting guide to know more.