Pricing:Primary vs. Reinsurance

Phil Bell, CPCU, ARM, AReBrenda Gibson

Brent Wells

Overview

1. Primary Insurance Pricing

i. Liability

ii. Workers’ Compensation

iii. Property

2. Reinsurance Pricing

i. Various Approaches

ii. CRL’s Approach

Premium = ???

Auto Liability

Underwriting/Pricing Information

Pricing Example

General Liability

Underwriting/Pricing Information

Pricing Example

Public Officials Liability

Underwriting/Pricing Information

Pricing Example

Law Enforcement Liability

Underwriting/Pricing Information

Pricing Example

Workers’ Compensation

Underwriting/Pricing Information

Pricing Example

Property

Underwriting/Pricing InformationSchedule Data:- Address- Longitude/Latitude- Insurable Values- Occupancy Type- Construction Code- Year Built- Square Feet- Number of Stories- Sprinkler System- Alarm System- Flood Zone- Roofing Type- Historical Valuation- Renovation Dates

Pricing Example

Reinsurance

Various Approaches

Exposure Rating- First Loss Scale- Price per Million

+Additional Expenses

- Internal- Retrocessional

- Profit/Contingencies

Experience Rating- Gather Loss Data

- Trend/Develop Losses- Factor for Unused

Exposure

+Additional Expenses

- Internal- Retrocessional

- Profit/Contingencies

Combination (Exposure and

Experience Rating)

CRL’s ApproachA Walkthrough Example