MatBlas

Course Overview: Fundamentals of Insurance Pricing

Our ‘Fundamentals of Insurance Pricing’ course is a comprehensive guide designed for insurance professionals seeking to master the essentials of pricing and risk classification. This course provides a step-by-step exploration of key principles, frameworks and methodologies used in the industry, ensuring participants gain practical, actionable knowledge.

The course is delivered through video recordings, allowing participants the flexibility to learn at their own pace and on their own schedule.

Through five expertly crafted modules, participants can expect to:

• • • Develop a strong understanding of the statistical framework of insurance pricing, including how frequency, severity and expected claims costs are used to calculate premiums. The course also explains the relationship between risk, reserves, and capital, providing a foundation for informed decision-making.
    • Explore key pricing principles, including Lloyd’s Minimum Standards, basic pricing models, and how data is used to derive parameters and relativities. Practical insights are provided on constructing premiums step by step, factoring in expenses, commissions, and loss ratios.
    • Learn to design consistent pricing models by examining the characteristics and components of technical frameworks. Participants will gain practical knowledge of pricing property and liability classes, incorporating methods such as layering, first loss scales, and increased limits factors.
    • Gain expertise in management reporting, including rate monitoring, risk-adjusted rate changes (RARC), and the integration of new business into reporting frameworks.
    • Apply experience rating techniques, such as loss ratio projection for business planning and portfolio evaluation, and understand methods for pricing policies with substantial claims experience.

    Whether you’re an underwriter, actuary, or aspiring insurance professional, this course offers the tools and insights needed to excel in pricing strategies and elevate your career over the following five modules:

Module 2: Basic principles of insurance pricing

• • • Part 1: introduces the basics of Lloyd’s Minimum Standards framework, basic pricing models and how data is used to derive pricing parameters and relativities.
    • Part 2: covers step by step how to build up a premium from the expected loss cost given expenses, commissions and other loads and the relationship between premium, loss cost and loss ratios. This module explains different loss ratios used in practice and their associated premium.

Module 4: Management reporting

• • • Part 1: basics of rate monitoring for renewal policies
    • Part 2: the concept and framework for the risk adjusted rate change (RARC) within Lloyd’s Minimum Standards and how this is a by-product of a consistent technical pricing framework.
    • Part 3: RARC examples by class of business.
    • Part 4: rate change vs rate adequacy and how new business can be incorporated in the rate monitoring report.

Module 5: Experience rating

• • • Part 1: basic prianciples of experience rating and loss ratio projection techniques used for business planning and to evaluate performance of a portfolio of policies.
    • Part 2: pure premium or burn cost method used to pricing policies with sufficient claims experience.