Professionnal liability - Technical pricing

Client Situation


  • Client : Belgian insurance company

  • Product: Professional Liability Insurance for Individual Care Providers.

  • Needs support to compute a technical tariff

  • Current commercial tariff based on the profession


Issues


  • Database creation quite time-consuming because of a lot of data issues

  • The variable describing the profession includes more than 200 modalities

  • Assessing the consistence of the current classification used for the profession



Reacfin’s Contribution


  • Construction of a cleaned database

  • Use regression trees to perform an a priori classification for the profession variable

  • Implementation of generalized linear models to assess significance of the explanatory variables and select the most relevant.

  • Analysis of the stability in time to select variables and perform some gatherings of modalities


Results & Benefits


  • Awareness of the management of the poor data quality

  • Better understanding of the variables influencing the claims’ frequency and claims’ costs

  • Assessment of the current classification for the profession variable

  • Delivery of an Excel-file to compute the technical tariff for some specific profiles

  • Presentation to the CoDir of the final results and methodologies used