More Analyses
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.

InEdge’s RISK RATING & On-Level Analytics Accelerator – A NEW PARADIGM!

Risk Rating & On-Level Analytics Accelerator is an intellectual property that presents a new paradigm to support the rate development process. It is a set of tools that facilitates the flow of historical data thus facilitating the performance of On-Level Rating Analytics (segmentation, rating and experience analysis). Risk Rating & On-Level Analytics Accelerator has been developed with the specific needs of Actuaries and Pricing Managers in mind and eliminates many of the issues with the actuarial rate development process. In the hands of experienced Pricing Managers, Risk Rating & On-Level Analytics Accelerator leverages your historical data to better understand the impact of rate and rate rule changes or extensions on key performance measures of P&C insurance.

Risk Rating & On-Level Analytics ACCELERATOR
eases the rate development process by
providing comprehensive scenario-building tools

It also dramatically reduces the time and cost associated with rate development for the following reasons:

  • It does not require programming;
  • It supports scenario management that enables quick comparisons of
    rating assumptions;
  • It features a customizable interface to existing rating engines / processes eliminating the need to “re-create” the rating process or environment for tariff simulation;
  • It provides an environment for Dislocation, Sensitivity and
    Pricing Analyses;
  • It effectively uses historical data (premiums and loss experience) for On-leveling of the Book of Business.

Risk Rating & On-Level Analytics Accelerator EMPOWERS PRICING MANAGERS

The Risk-Rating & On-Level Analytics Accelerator puts powerful new features directly into the hands of Pricing Managers:

  • Segmentation: Segment risks in the Book of Business along any criteria.
  • Versioning: Select and work with an arbitrary “version” of the
    Book of Tariff.
  • Attributes: Apply default attributes, and override attribute values for new or existing rating criteria on selected risks corresponding to the rating assumptions under examination.
  • External Rating Engines: Rate a Book of Business segment that has been extracted using a version of the Book of Tariff provided by an external rating engine.
  • Re-Rating of Risks: Import newly-rated risks from the rerating process.
  • On-Level Loss Analysis: Analyze on-level loss experiences on the re-rated risks using actual incurred losses and expenses.
  • Dislocation Analysis: Easily perform dislocation analysis of new rate proposals on the Book of Business.
  • On-Level Premium Publication: Publish On-Level Premiums directly to the data warehouse or reporting environment.
RROAL_Features_1
RROAL_Features_1
RROAL_Features_2
RROAL_Features_2

Risk Rating & On-Level Analytics Accelerator – The Benefits

Risk Rating & On-Level Analytics accelerator benefits all aspects of actuarial rate development, including underwriting analysis, written premium analysis and Book of Business analysis.

IMPROVED PRICING FOCUS

Pricing Managers spend more time performing rate development analyses such as dislocation and scenario testing and less time on
programming tasks;

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+

IMPROVED COMPETITIVENESS

More rating analytics projects per year ensure products are both competitive and profitable in desired markets;

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INCREASED MANAGEMENT TRANSPARENCY

The Risk Rating & On-Level Analytics Accelerator environment is fully manageable and ensures data is up-to-date and relevant; Pricing Managers can choose to publish the On-Level Premiums and Experience to key stakeholders within the company;

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COST-EFFECTIVE

Risk Rating & On-Level Analytics Accelerator leverages existing investments in Enterprise Rating technology by giving it a Decision Support and an Analytics dimension.

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Integration Benefits


Risk Rating & On-Level Analytics Accelerator integrates into existing infrastructures, bringing clarity and efficiency to such diverse elements as risk scoring models, claims risk analysis and Written Loss Ratio analysis.

  • Works with your existing data warehousing infrastructure
    —————————————————————————————————————————–————————————————————-
    Risk Rating & On-Level Analytics Accelerator is
    Intellectual Property designed to work with your existing data
    warehousing infrastructure.
  • Works with existing rating engines
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    Risk Rating & On-Level Analytics Accelerator is also designed to work with your existing rating engines or processes deployed in the Enterprise, thus leveraging your rating process investments.
  • No need for programming
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    Risk Rating & On-Level Analytics Accelerator includes an Integrated Development Environment (IDE) for the creation and management of OLA objects such as Segments and Scenarios, eliminating the need for programming and increasing productivity.

The architecture is presented below:

Insurance Business Intelligence On-Level Analytics Architecture