Trend Segmentation
Trend Segmentation, also known as Portfolio Shift Analysis, is similar to Complete Segmentation, except it analyzes the growth/decline in exposure or policy count within the portfolio or to the joint goal of 1) change in relative volume measure over time and 2) either loss ratio, claim frequency, claim severity, loss cost, or profit. Because this joint goal is considered in identifying segments, it is not expected that the description (common attributes) of each segment will be the same as those of a Complete Segmentation. Trend Segmentation is an ideal analysis when adverse selection (growth of unprofitable segments and decline of profitable segments) is a concern, or to test whether marketing, underwriting, or pricing changes resulted in unintended shifts in the portfolio.