Year

Classification
Masonary
Carpentry

Claim Amount ($)

5900
15010

The Expected Loss Ratio and D.Ratio and Payroll for each item
Item

1990

1991

1992

Carpentry
Carpentry
Concrete
Misc
Misc
Masonary
Masonary
Carpentry
Electrical
Electrical
Electrical
Misc
Carpentry
Carpentry
Carpentry
Electrical
Electrical
Electrical

3700
41200
3600
11500
12100
19000
5900
3300
8400
31000
4500
2300
5900
15010
3700
41200
3600
11500

Masonry 5022
Electrical 5190
Concrete 5215
Carpentry 5645

ELR

D Ratio

6.43
1.84
6.25
4.37

0.25
0.27
0.25
0.31

If the max primary loss value is 5000$, the weighing value is 0.2
used in accessing standard premium

o and Payroll for each item for three years is summarized below
Payroll
1990
410000
190000
352000
725000

Payroll
1991
435000
195000
359000
710000

Payroll
1992
429000
199000
321000
775000

0$, the weighing value is 0.27 and the ballast value is 33000$. Obtain the EMR
m

0
S.No

1
Classification
Code

Expected Loss
Ratio (ELR)

D.Ratio

Pay Roll
1990

Expected
Losses
(2*4)/100

Expected
Actual Incurred
Primary
Losses
Losses (3*5) i,e Claim Amount

Actual
Primary
Losses

Effective Date 1/1/90 to 31/12/90

1

5022

6.43

0.25

410000

26363

6591

5190

1.84

0.27

190000

3496

944

5215

6.25

0.25

352000

22000

5500

5645

4.37

0.31

725000
1677000

31683
83542

9822
22857

5700
15010
3700
41200
3600
11500
12100

5000
5000
3700
5000
3600
5000
5000

92810

32300

19000
5900
3300
8400
31000
4500
2300

5000
5000
3300
5000
5000
4500
2300

Effective Date 1/1/91 to 31/12/91

1

5022

6.43

0.25

435000

27971

6993

5190

1.84

0.27

195000

3588

969

5215

6.25

0.25

359000

22438

5610

5645

4.37

0.31

710000

31027

9618

1699000

85024

23190

74400

30100

11500
6700
17000
3100
6100
30000

5000
5000
5000
3100
5000
5000
28100

Effective Date 1/1/92 to 31/12/92

1

5022

6.43

0.25

429000

27585

6896

5190

1.84

0.27

199000

3662

989

5215

6.25

0.25

321000

20063

5016

5645

4.37

0.31

775000

33868

10499

1724000

85178

23400

74400

(Total
Actual
Excess)
= (g-h)

e
(Total
Expected
Losses)

f (Total
Expected
Primary)

g
(Total
Actual Incurred)

253744

69447

241610

a (Weighing
Value)

b (Ballast)

c (Expected
Total Excess)
=(e-f)

0.27

33000

184297

151110

Primary Losses
(1)

Stabilizing
Value (2)

Ratable Excess
(3)

Total
(1+2+3)

Actual

90500

167537

40800

298837

Expected

69447

167537

49760

286744

Total A
Total B

253744

Total Actual Incurred

241610

Total Expected Primary

90500

(Total
Actual
Primary)

90500

Stabilizing Value = Ballast Value + (1-w) total expected losses

167537

Ratable Excess = w x Total Expected Excess Loss

Ratable Excess = w x Total Actual Excess Loss

49760

40800

Actual Primary Losses + Ballast Value + Weighing Value x Actual Excess Losses + 1 - (weighing value x expected excess loss)
Expected Primary Losses + Ballast Value + Weighing Value x Expected Excess Losses + 1 - (weighing value x expected excess loss)

Hence EMR =

Total Expected Losses

Total of Actual (A)

Total of Expected (B)

298837
286744

1.04

0
S.No

1
Classification
Code

Expected Loss
Ratio (ELR)

D.Ratio

Pay Roll
1990

Expected
Losses
(2*4)/100

Expected
Actual Incurred
Primary
Losses
Losses (3*5) i,e Claim Amount

Actual
Primary
Losses

Effective Date 1/1/90 to 31/12/90

1

5022

6.43

0.25

410000

26363

6591

5190

1.84

0.27

190000

3496

944

5215

6.25

0.25

352000

22000

5500

5645

4.37

0.31

725000
1677000

31683
83542

9822
22857

5700
15010
3700
41200
3600
11500
12100

5000
5000
3700
5000
3600
5000
5000

92810

32300

19000
5900
3300
8400
31000
4500
2300

5000
5000
3300
5000
5000
4500
2300

Effective Date 1/1/91 to 31/12/91

1

5022

6.43

0.25

435000

27971

6993

5190

1.84

0.27

195000

3588

969

5215

6.25

0.25

359000

22438

5610

5645

4.37

0.31

710000

31027

9618

1699000

85024

23190

74400

30100

11500
6700
17000
3100
6100
30000

5000
5000
5000
3100
5000
5000
28100

Effective Date 1/1/92 to 31/12/92

1

5022

6.43

0.25

429000

27585

6896

5190

1.84

0.27

199000

3662

989

5215

6.25

0.25

321000

20063

5016

5645

4.37

0.31

775000

33868

10499

1724000

85178

23400

74400

(Total
Actual
Excess)
= (g-h)

e
(Total
Expected
Losses)

f (Total
Expected
Primary)

g
(Total
Actual Incurred)

253744

69447

241610

a (Weighing
Value)

b (Ballast)

c (Expected
Total Excess)
=(e-f)

0.27

33000

184297

151110

Primary Losses
(1)

Stabilizing
Value (2)

Ratable Excess
(3)

Total
(1+2+3)

Actual

90500

167537

40800

298837

Expected

69447

167537

49760

286744

Total A
Total B

253744

Total Actual Incurred

241610

Total Expected Primary

90500

(Total
Actual
Primary)

90500

Stabilizing Value = Ballast Value + (1-w) total expected losses

167537

Ratable Excess = w x Total Expected Excess Loss

Ratable Excess = w x Total Actual Excess Loss

49760

40800

Actual Primary Losses + Ballast Value + Weighing Value x Actual Excess Losses + 1 - (weighing value x expected excess loss)
Expected Primary Losses + Ballast Value + Weighing Value x Expected Excess Losses + 1 - (weighing value x expected excess loss)

Hence EMR =

Total Expected Losses

Total of Actual (A)

Total of Expected (B)

298837
286744

1.04