Recent enhancements to Risk Researcher has further extended its premium modeling functionality to support 'True’ Premium Indexation Projections, scenario-based product scores and claim management ratings for advisers.
‘True’ premium indexation projections
Risk Researcher has extended its premium modeling functionality with the ability to set cover indexation assumptions to provide ‘true’ projections of future premiums.
Risk Researcher’s powerful premium engine not only has the ability to apply premium increases as a result of future cover indexation increases, it can also apply increases to optional benefits and apply them based on the methodology adopted by each insurer.
Risk Researcher’s ability to provide ‘true’ premium projections allows advisers to highlight the potential cost benefits of Insurers who charge a higher premium in the initial years of coverage but provide a more competitive long term pricing structure.
For example, assume a level premium scenario for a Male, Non-Smoker, Age Next 30 with $500,000 of term life cover being indexed each year at 3%.
This image illustrates two products that both start priced at the ‘top-end’ of the market, but as indexation is applied they gradually become cost competitive. The long term pricing differential is clearly illustrated.
Scenario based product scores
Risk Researcher’s Premium Modelling module adopts a dynamic scenario-based approach when calculating product scores. Under this sophisticated method, the product scores and ratings are automatically tailored to reflect the benefits and features that clients will actually receive.
In contrast, the general product scores generated from outside of Premium Modelling (such as Compare Ratings) are based on the old ‘everything is included’ approach, which assumes that the client will be taking up all available features of a policy.
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“Scenario-based product scores provide a better correlation between the quality of cover that is being recommended to clients and the cost of the cover being recommended.” |
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An example of the scenario-based scoring method is where an adviser elects not to include Trauma Reinstatement in their client’s premium comparisons. Under this scenario, the product ratings for the provision 'Reinstatement of Trauma' is set to 'No' unless the feature is built-in to the product.
Another example is where an adviser models TPD premiums on an 'Any' definition basis. In this case, Dynamic Scoring removes the provision 'TPD - Own Occupation' from the scoring process because it is not relevant to the client scenario.
Advisers should use the Ratings function within Premium Modelling to attach product rating comparisons to their premium reports. This function provides the same report format as Compare Feature Ratings, but with the added advantage of having the result data tailored to the client scenario.
Claim management ratings
Risk Researcher now includes claim management ratings for advisers.
This rating process, taken from the risk store’s Claims Management Analysis Programme (C-MAP) initiative, delivers a detailed analysis for advisers about the way insurers manage claims. This can be used as a basis to monitor the quality of the claimant’s experience at claim time.
C-MAP ratings can be obtained from within Risk Researcher’s Premium Modelling module. They are treated as a distinct rating and do not form part of the product’s overall scenario-based score.