Underwriting Support

Insurance underwriting is primarily based on the analysis of claim experience by different portfolio sectors that relate to premiums and exposures. Underwriting of personal lines and small-medium business insurance involves analysis at the product and risk level, while large commercial insurance underwriting requires individual client claims analysis.

InsFocus BI’s underwriting solutions are listed below.

Profitability Indicators Calculation of loss ratio, loss frequency, burning cost, and risk cost per policy based on various dimensions is the key tool for underwriting analysis. These calculations change according to the time perspective used in a report (e.g. loss ratio from the accountant’s point of view = (paid+∆ outstanding)/(premiums-∆ unearned), whereas from the underwriter’s point of view = (paid+outstanding)/(premiums-unearned)). The formulas utilized by InsFocus BI are adjusted according to the time perspective used. Product-Section Analysis Insurance products are usually comprised of sections or covers. Related covers are usually grouped by line (e.g. a commercial package policy may contain a fire, burglary and employer’s liability section). The pricing of insurance products requires vertical (by product) and horizontal (by line/section) analysis of profitability indicators. The data design and query methods employed in the system enable such analysis. Risk Analysis Each of the various insurance products underwritten by a company maintains its own characteristic risk parameters (e.g. vehicle type and driver age for motor vehicle insurance, building type and floor for home insurance, occupation and health status for health and accident insurance). To correctly determine insurance pricing, underwriters need to analyze claim experiences for each product according to its specific risk parameters. The system’s unique architecture enables defining an unlimited number of risk parameters for each insurance product, and performing ad-hoc querying through such parameters. Client-Level Reporting Underwriting large commercial accounts requires profitability reporting at the client level. The analysis may also require multi-year views by insurance product at the same level. The system can view at the client level the same profitability report from any historical date, thereby providing the underwriter with a complete view of the client’s portfolio. The system can also calculate client claim frequency for specific product sections, and highlight clients with higher-than-average results. Rate Monitoring Property insurance results are strongly affected by the average rates applied to the insured portfolio. Underwriters need to track these average rates, and compare them across products and years. The measurement of premium rates (premiums divided by sums insured) is an integral part of InsFocus BI.