[[Actuarial Notes Wiki|Wiki]] / [[Exam 5 (CAS)]] / **Territory Ratemaking** ## Definition ==Territory Ratemaking== is the process of developing differential rates by geographic area to reflect variations in loss costs across locations. ## Methodology Similar to classification ratemaking: ``` Territory Relativity = Territory Loss Cost / Base Territory Loss Cost Then apply to base rates ``` ## Considerations - Population density - Traffic patterns - Crime rates - Weather exposure - Legal environment - Repair costs ## Related Concepts - [[Classification Ratemaking#Definition]] - [[Homogeneity#Definition]] ## References - Werner & Modlin, Chapter 10