Superseded, 27 September 2026. This page is the record of Call #7 (27 Aug) as presented, and keeps the figures and vocabulary of that date. In paper v5.2 (27 September 2026): the 3+ product relativity is 0.9683 on 9.44 expected years against 6.53 for mono-line (was 0.9425 on 7.92 against 2.72); unconstrained / constrained CLV are now base / with-growth; filing / planning basis are now the revenue-neutral / level-effect basis. The current state is on the project hub.
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Round 1 is in. Round 2 is five decisions — one of them needs the room

CAS Ratemaking Working Group  ·  Bi-Weekly Call #7  ·  Phase 6 — paper v3.2 (49 pp), toolkit cas_clv v1.1, executive summary (3 pp)
Thu Aug 27, 2026 · 4:30 PM ET
30 min · hard stop 5:00 PM
Researcher: Pramod Misra
POG: Mondello · Robinson · Paik · Werner · Kozlowski
Round 1 is closed: 24 written comments (Robinson 18, Mondello 6), four of which found things that were wrong rather than unclear — all fixed in code, numbers regenerated, carried by paper v3.0 → v3.2. On 21 August you both said the same thing: “it sounds like a lot of both of our comments here you’ve maybe addressed — we just have to read what you’ve already written.” So this page is not a re-run of that review. Q1 is the one decision that needs the group in the room — it is the §3.5 question Robinson left open on the 21st. Q2 exists only to minute what you ratified verbally. Q3–Q5 are judgement calls that are properly yours; if we run out of time, answer Q1 here and the rest by email and we will proceed on the recommendations. ★ = researcher's recommendation.
Q1 §3.5 — does the filing/planning split earn its place, and what do we call it?

Now pick what §3.5 becomes in the delivered paper.

What the two bases actually do, at v3.3. Same tenure curve, two normalisations. On the revenue-neutral basis the book total is unchanged to $0.09 of rounding, so the effect is pure redistribution: the 1 yr cohort +2.85% and the 10+ yrs cohort -7.43% — the tenure credit runs backwards. On the level-effect basis every cohort gains (1 yr +17.28%, 10+ yrs +4.84%) and the book rises by $2,615,287. The missing sentence, which Robinson reasoned out on the call: the flat-loss-ratio comparator is the tenure-average loss ratio, not the first term's — so a ten-year customer has already banked the improvement and a first-year one has it all ahead. That is the whole reason the gradient is steepest at low tenure. It appeared nowhere in the manuscript through v3.2; it is now §3.5's “What the comparison is against” paragraph.
A
Keep both bases, rename them — revenue-neutral relativity basis and level-effect basis. The words then say what the arithmetic does, and the section keeps the paper's main tenure caution.recommended
B
Keep both, keep the names — add the missing context and the baseline sentence only. Least churn across the toolkit, the planner and the deck.
C
Keep both, different words — e.g. rate-neutral and portfolio-value. Name the pair you would use.
D
Publish one basis only — the revenue-neutral one, since it is the toolkit default, and move the other to the framework doc. This is the option Robinson's question points at.
Q2 The two CLV variants were named backwards. Minute the fix.

Confirm the pair we carry into the published toolkit.

A
Neutral pair — clv_base / clv_with_growth. Removes the ambiguity instead of pointing it the other way.recommended
B
Flip the original — clv_constrained becomes the filing base. Matches the instinct, but the same word still carries the ambiguity.
C
Name the use, not the constraint — clv_filing / clv_planning.
D
Revert to the v2.0 names and add a clarifying paragraph.
Q3 Cross-sell was credited every renewal term. What default do we ship?

Now pick the shipped default for the hazard p.

For scale: the v2.0 per-term treatment valued the same assumptions at $693.40 per customer — an annuity of cross-sales. The corrected figure is $376.21, of which $98.85 is the single sale and $277.36 the recurring upsell uplift.
A
p = 1.0 — the sale lands at the first renewal. Most favourable timing, so the figure is a ceiling on growth-programme value: $376.21 per customer here.recommended
B
p = 0.25 — a four-year expected time to first cross-sale. More realistic, but it is another fitted assumption we cannot support from this book.
C
No default — require the user to state p explicitly, so the assumption can never be implicit.
D
Drop cross-sell from the shipped illustration entirely and document the mechanism only.
Q4 The tenure curve did not reproduce on real data. How do we ship it?

Now pick how the curve ships.

What the three datasets said. Wisconsin LGPIF: +19.93%/yr over tenures 0–3 (R² 0.949) — until the final cell, one fund-year of catastrophe, turns it into -7.93%. One year of data flips the sign. Spanish households: +1.80% and not monotone. Shipped synthetic curve: +4.22%.
A
Mechanism, not parameter — keep loss_trend = 0.0 as an exact no-op, ship the curve as an illustration, and accept a user-supplied curve. The published finding stays the direction, which holds for any magnitude.recommended
B
Remove the shipped curve — expose the machinery with no default curve at all, forcing every user to supply one.
C
Ask CAS for a data call — loss ratio by policyholder tenure across carriers. Schedule P sets the bar: between-carrier dispersion is 24.4% against a ten-year curve effect of 35.0%.
D
Ship the LGPIF-fitted +19.93% as an alternative curve alongside the synthetic one.
Q5 Which segment should carry the retention-adjusted loss ratio?

Now pick the segment the published exhibit leads with.

The result. The 3+ products segment has the worst first-term loss ratio of the three — 0.6652 — and still indicates a credit of 0.9425, on 7.92 expected years against 2.72 for mono-line. A single-term exhibit ranks it last of three; the lifetime exhibit ranks it second.
A
Product count — the closest analogue to a credit insurers actually file (the multi-policy discount), and the segment with a real persistence gradient.recommended
B
Region — a conventional rating variable, but this book's retention barely varies across it, so the exhibit says little.
C
A rating variable the POG names — tell us which and we will fit it.
D
Revert to the by-tenure view only.
Reserve — for the 10 September call. The CAS Ratemaking, Product and Modeling Seminar session. A complete submission package is drafted and validated against the CAS webform limits: title "Customer Lifetime Value You Can Actually File" (45 of 75 characters, no abbreviations), a 225-word session description, three Bloom's-verb learning objectives, and a 24-slide accessibility-compliant deck generated from the paper's own numbers. Two things we need from CAS: the RPM 2027 submission deadline, and whether this is submitted as a project deliverable under the research agreement or as an individual speaker proposal. Both have been open since roughly 30 June. Also worth a moment: the deck leads with the two negative results rather than the framework — the tenure credit running backwards, and five-year CLV adding almost nothing to current-term margin for ranking. That is a deliberate choice about how this work is positioned to the membership, and we would rather it were a shared one.
This research project has been funded by the Casualty Actuarial Society.