Base Rates

1. Expense fees per policy

2. Loss costs per policy - historical loss and exposure data and distributions. The non-modeled perils are based on historical data.

3. Fixed reinsurance costs per policy - from cat models. Allocated to policy form based on the product of the earned house years and coverage amount. Loading is the base rate is the ratio of allocated fixed reinsurance costs to earned house years. For each location, the simulated expected gross annual losses are created. Then losses by each location are aggregated statewide to get the overall average loss. The final base rate for hurricane, by policy form, is the loaded sum of the loss cost and fixed reinsurance cost.

4. Fixed underwriting expenses per policy

5. Variable expenses

6. Profit

Base Rates for modeled perils