GRET Factors for 2009 Compared to Historical Factors
by W. Michael Reese
November 2008

The GRET factors for 2009 were released to the NAIC in May, the factors were posted on the NAIC web site for comments, and they have now been adopted.

This is the second time the factors have been released with an expanded list of company types. However, as pointed out in comments sent by the New York Insurance Department, there is concern that over 50% of the companies included are in the "Other" category. New York also points out that average premium per policy for the "Other" category increased from $19 to $62 from 2008 to 2009.

The following comparison of the historical factors, although showing stability in factors for some company types, continues to show questionable variability in the factors for some.

History of Factors - Acquisition
Expense Factor Year Branch Office Direct Marketing Home Service Career General Agency Brokerage PPGA Multiline Other
Per Policy 1998 $65 $91 $53         $73
  2001 $70 $87 $60         $78
  2003 $66 $80 $61         $85
  2006 $76 $111 $72         $78
  2007 $62 $130 $64         $79
  2008 $54 $112 $75 $108 $83 $79 $111 $71
  2009 $59 $110 $66 $105 $98 $100 $113 $72
           
Per Unit 1998 $1.15 $1.60 $0.95         $1.30
  2001 $1.25 $1.55 $1.05         $1.40
  2003 $1.15 $1.40 $1.10         $1.50
  2006 $1.35 $2.00 $1.30         $1.40
  2007 $1.10 $2.30 $1.15         $1.40
  2008 $1.00 $2.00 $1.30 $1.90 $1.50 $1.40 $2.00 $1.30
  2009 $1.10 $2.00 $1.20 $1.90 $1.70 $1.80 $2.00 $1.30
           
% age Premium 1998 72% 50% 29%         40%
  2001 78% 48% 33%         43%
  2003 73% 44% 34%         47%
  2006 84% 61% 40%         43%
  2007 69% 72% 35%         44%
  2008 60% 62% 41% 60% 46% 44% 61% 39%
  2009 66% 61% 36% 58% 54% 55% 62% 40%


History of Factors - Maintenance
Expense Factor Year Branch Office Direct Marketing Home Service Career General Agency Brokerage PPGA Multiline Other
Per Policy 1998 $33 $46 $27         $37
  2001 $35 $43 $30         $39
  2003 $33 $40 $31         $43
  2006 $38 $56 $36         $39
  2007 $31 $65 $32         $40
  2008 $27 $56 $37 $54 $42 $40 $56 $36
  2009 $30 $55 $33 $53 $49 $50 $56 $36




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