BI Insurance

Profitability module

Combining data from various sources: premiums, claims, claim reserves, administrative costs, as well as reinsurance figures Profitability module offers highly powerful analysis of profitability result split by:

  • financial & underwriting year (quarter),
  • product risks (e.g. material damage vs. person injury for MTPL),
  • structured claim event place,
  • risk parameters (e.g. region, customer and object insured characteristics),
  • other useful slices (e.g. sales channel, salesman, broker, unit, new / renew policy indicator, duration of policy, claim handler).

Depending on availability of market capacity statistics (e.g. number of vehicles) and its particularity Profitability module may provide extended suggestions: e.g. how many potential customers will be impacted by the decision to increase prices (what-if analysis or scenario testing).

Using Profitability module top management will:

  • review profitability of overall product or main segments (assess achievement of profitability targets);
  • look for segments with low loss ratio and large expansion possibilities;
  • assess quality of the predictions (i.e. compare reserves estimated versus real claim flow);
  • identify high level bottle necks (e.g. increased average claim payment, decreased claim frequency for portfolio or segment);
  • access profitability of strategic customers;
  • receive arguments for negotiations by checking profitability of policies sold by particular broker or employee.

Using Profitability module risk underwriter will:

  • assess risk profile of insurance contract portfolio
  • assess adequate risk price within segments - identification of under priced and overpriced segments;
  • avoid anti-selection (decreased possibility to accept bad risks comparing with competitors) by identification and further implementation of new risk parameters;
  • monitor impact of pricing changes as well as marketing campaigns on sales volume;
  • drive efficient anti-fraud programme.

Using Profitability module actuary will:

  • access earned / unearned premiums in any segment by 360 & 365 methods for both single or multi object policies using parameters to define reporting period;
  • prepare data sets for pricing tasks;
  • calculate risk based premium using prepared data sets and dedicated statistical software;
  • develop measured reinsurance program and will provide collection of the arguments for negotiations with reinsurers;
  • upload estimated reserves back to the system. BI Insurance engine splits reserves to individual object insured level and ensures access to full profitability of any risk driven segment;
  • perform liability adequacy test.