Pricing and decisions by location
The Underwriting Framework
A design for keeping a live picture of exposure per location instead of one that is accurate the day it is built.
The situation it's designed for
A portfolio manager prices two million properties against a hazard view refreshed each quarter. In between refreshes, a culvert fails upstream of nine hundred of them and nothing in the pricing knows.
The model was never wrong. It was current, and then time passed. Reviewing every location continuously has always been the obvious answer and never the affordable one.
This framework designs for continuous review of the locations where something actually changed, and for the review to be defensible when a regulator or a reinsurer asks how the number moved.
What it hands your team
- A design for per-location review that runs against change, not against the calendar.
- A record of why an exposure figure moved, in a form an actuary and an examiner can both follow.
- The escalation design: which movements are routine repricing and which reach a person before they reach a customer.
- A confidence statement per location, so thin coverage is visible rather than averaged away.
What stays a human decision
- Rate filings, and any change that touches a policyholder's terms.
- Non-renewal and declination decisions.
- Overriding the model, which happens, and should be recorded when it does.
What it's not for
- Building your hazard science. We design how the picture stays current; the catastrophe view is yours or your vendor's.
- Automated pricing decisions on individual accounts. The design stops short of that on purpose.
- Jurisdictions where you have not yet resolved what an automated contribution to pricing is permitted to do.