Rate on Line (RoL): Definition and Calculation
Rate on Line (RoL) is a core insurance pricing metric used throughout the platform to support comparability across policies, assets, and markets. RoL expresses the relationship between premium charged and coverage capacity provided and serves as a standardized measure of pricing intensity.
Definition and Formula
RoL is defined as:
RoL = (Premium ÷ Coverage Limit) × 1,000RoL represents the premium paid per $1,000 of insured coverage. The specific inputs used to calculate RoL vary by policy type and coverage structure.
Temporal Smoothing
RoL metrics displayed at the market level—including indices and aggregate views at the state, city, and peril level—employ temporal smoothing using a 120-day rolling average.
Temporal smoothing reduces short-term volatility while preserving meaningful pricing trends and market directionality.
Peer-level RoL metrics, including those used in Pricing Comparables and peer group analyses, are not smoothed. These values are derived directly from bound policy data and reported without temporal adjustment to preserve transactional precision.