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j) Extension of exposure technique - Where, as is
generally the case, the experience period extends over
several years, there have been typically been changes
in manual rate levels over the time. If the actuary uses
the loss ratio method in the development of the rate level
changes, the earned premium underlying the loss ratio
calculations must be on a current rate level basis. Re-
rating each policy using current rates manually is
impossible but with sufficient data and rating software
the resulting premium is quite accurate. This method us
known as Extension of exposure technique.

k) Parallelogram Method - When on-level premiums
cannot be calculated based on Extension of exposure
technique, an alternative method called Parallelogram
method is used. This method adjusts the earned
premiums of a calendar year to current rate levels based
on simple geometric relationships and an underlying
assumption that exposure is uniformly distributed
overtime. In cases, where material changes in exposure
level have occurred over the period, or where there is
non uniform pattern of the written exposures, the

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