I like my clients to make informed decisions. How do I do that? I teach my clients how a renewal is calculated by the insurer. This will be my series on what some of the definitions mean.
Benefits Canada has created an article that assists in explaining what a Trend Factor is.
In the simplest terms, the Insurance Company is saying that whatever you purchased last year will be a certain percentage more next year. For example, every year the Dentists increase the amount of money they charge to the Insurance Companies for Dental procedures. Under the Extended Health a prime example is newer, more expensive prescriptions. I will use my Mom again as an example, she was on a relatively inexpensive prescription and the drug company stopped making it. She is now forced to look at other alternatives.
The Trend Factor is added onto the Loss Ratio. A Loss Ratio is claims/premium. Extended Health Trend Factor has dropped to below 10% and Dental has stayed pretty stable at around 7%.
Next week I will explain what a Reserve is and how it affects your renewal.
If you want to work with a Broker who helps you make informed decisions, contact Glendinning Insurance Services.