Commercial Lines Market

As capital has become scarcer and investment income has diminished the importance of delivering an underwriting profit that meets the business’s return on capital targets has moved to centre stage.  Underwriters and management are now required to show to investors, regulators and rating agencies that they have a technical approach to pricing that is rigorous, consistent and validated.  EMB offer an extensive range of pricing services to our Commercial Market clients to support them in doing this; ranging from pricing software to portfolio reviews and individual account rating.

The variety of risks and the variety of insurance providers in the Commercial Market leads to a wide variety of pricing needs.  At EMB we have a track record of delivering high quality practical solutions to our clients in many areas of technical rating.

Experience rating Individual Accounts – at EMB we have significant levels of experience in supporting underwriters in the pricing of individual accounts.  We carry out this work along side underwriters, transferring our technical knowledge as we go, either as we price a contract or as we peer review the technical work of the underwriter.   To assist underwriters in pricing individual accounts we have developed Prisemb, a unique piece of software targeted at the Commercial Market underwriter.  More details can be found under Individual Accounts.

Portfolio Reviews – there are several services EMB provides in terms of reviewing a portfolio of business.  We can look at the overall profitability of a portfolio, we can check on the appropriateness of the relativities between rates in the rating manual, we can look at the impact of changing the rating manual, we can compare the actual rates achieved on the book to the technical rates and we can compare the profitability of different sections within a portfolio.  All of these can provide added value information to underwriters on the portfolio.

Rating Engines – at EMB we have experience in designing Rating Engines for our clients.  On these projects we not only calculate the appropriate technical rates for the business but also design and build a bespoke front-end to provide underwriters with an easy to use rating tool.

Multi-factor modelling - Multi-factor modelling (or Generalised Linear Modelling) is growing in the Commercial Market; partially this is due to the increasing volumes of data being recorded.  Classes of business that particularly lend themselves to this multi-factor modelling include Hull, Aviation and Professional Indemnity.  Multi-factor modelling is also useful as a tool in determining rating manuals for use by Managing General Agents.  More details of this work can be found in Pricing Models.

Bespoke rating - Many of the risks in the Commercial Market are specialist if not unique.  This may require a different approach to rating where we try to marry our technical expertise with the expertise of the underwriter.  This involves EMB working along with the underwriter to convert the underwriter’s knowledge into assumptions and models that the underwriter thinks appropriately reflects the risk and allows a more technical, more consistent approach to the pricing of a risk.