and Better Rates
Over the years, Insurance companies have resorted to various techniques to support their actuarial rate development process – all based on analysis of historical data and assumptions about experience development – to try and establish the appropriate rate for a given class of risks.
But because of the complexity of the process using current approaches, insurance companies can only afford a few “rating projects” in a given year.
This situation leads to missed market opportunities and sub-optimal pricing decisions.
Rating Analytics is a difficult task given the difficulties of integrating historical data on Policies, Premiums and Claims with the various rating development processes that may be in use by a carrier. Several issues inherent to Rating Analytics hamper the effectiveness of the overall rate setting process, including:
- Difficulty with Book of Business Segmentation;
- Multiple instances and types of Rating Processes;
- Analytical limitations in understanding On-Level Experience.
When the question is how to improve the actuarial rating process, the answer is with a Risk Rating & On Level Analytics Accelerator.