Liability And Compensation Insurance; Industrial Accidents And Their Prevention, Employers' Liability, Workmen's Compensation, Insurance of Employers' Liability And Workmen's Compensation

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At present all of the factors mentioned in the preceding chapter have their influence in the calculation of rates except "underestimate of outstanding losses," "effect of merit rating," and "profit." The first of these fac- tors represents a tendency which may disappear with improved methods of computing reserves for unpaid losses; the second, a tendency which more scientific rating will probably eliminate ; but the third should be considered, at least by the stock companies. It is ex- pected, ...of course, that rates as now calculated will yield a sufficiently liberal income to pay all losses and to leave a margin of profit, even though these three items are not specifically considered.
The influence which the several factors exert on the rate are expressed by differentials and loadings. A * The method here described is that used in the computation of rates for the major part of compensation insurance written in the United States. Departures from this method are in matters of detail rather than of principle.


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