California Ratemaker
Optimizing Rate Relativities within the California Sequential Analysis Requirements
Compliance with the California Code of Regulations for Private Passenger Auto ratemaking is not only cumbersome, but also results in premium subsidies and a challenging competitive landscape. Talon's CA Ratemaker optimizes rate relativities within the regulations by exploring combinations of correction factor values for each variable, investigating permitted compound variables via machine learning segmentations, and running thousands of iterations to optimize a deviance and/or fit measure. What does this mean? Optimized rate relativities reduce subsidies, mitigates adverse selection, and strengthens your competitive position.
Talon's CA Ratemaker is highly automated—once the analysis settings are input into the user interface, the results are found very quickly.
Key Advantages
- Full regulatory compliance with California Code of Regulations for private passenger auto ratemaking
- Automated—efficiently performs sequential analysis; outputs all required data and statistics for easy rate filing support, saving time and effort
- Increased accuracy—uses Simplex optimization over thousands of iterations to find the best combination of correction factor values within the rank-order variable weight constraints to yield rate relativities that more closely represent actual losses
- Identifies key compound variables—uses a combination of machine learning algorithms to efficiently search through an otherwise intractable number of possible non-linear rating variable combinations
- Menu-Driven, requires minimal training—Input key analysis parameters in "Analysis Workbench" user interface
- Fast—finds optimal result among thousands of iterations over a few days
- Easy-to-Use, Web-based—no complicated software installation
California Ratemaker Overview