The inflation rate implied by the inflation trend factors varies by line of coverage. Why is the inflation rate not constant?

The inflation trend factors track the changes in loss costs over time. The change in loss costs per year vary for each line of coverage and by year.

Inflation trend factors are determined by the industry specified on the Analysis Setup Data screen. SIGMA's actuarial analysts advise you to pick the industry that seems to match best. Don't be too concerned about a specific industry not being listed, as the impact of one industry as compared to another on the overall projection or reserve analysis is fairly minimal. "Services" is often a good general choice that satisfies many business functions if you are unsure.

Note: the workers comp inflation trend factor is shown on two exhibits. It is calculated on the Inflation "Trend Factor Calculation" page as a weighted average (of your choosing) of the payroll and medical care components. The computed factor is later shown on the "Loss and Trend Adjustments" page.