Compared with medical lines of business, dental products typically have more predictable claim patterns, lower overall claim dollar amounts, and much lower risks and severities of catastrophic claims. This predictability can foster complacency in dental rate-setting. Some companies go several years without a robust dental rating manual review or refresh. Companies instead may choose to focus on rating manual updates for higher-risk lines of business, and insurers may simply “trend forward” their dental rating manuals year after year without taking a critical look at what they should change.
It’s important to periodically review dental rating methodologies for actuarial soundness and to maintain competitive rates. If the starting claim costs and pricing factors in a rating manual are stale, premiums likewise will be stale and competitive positioning in the market could suffer as a result.