The Median Rate Project
There are so many variables in assessing risk and underwriting premiums, every insurer has a different appetite and different formula for underwriting risks, this is often driven by market share of a specific risk and also appetite for growth or decline in cover for a certain profession or risk. Pricing is a part of insurance placement and the cover variables is also a major consideration, the biggest priority for Earth Insurance is making sure insureds have the cover they need, with an insurer that is secure at a premium that is affordable.
The median rate project is about bench marking, is not a definitive rate that every insurer can opt into however it is driven by commonality in data. At Earth insurance we use this as a tool for a starting point for assessing the insurance placement. The data is built up from every qualified formal premium amount provided by an insurer for a specific profession, this information can be sourced internally by Earth insurance or provided to Earth insurance by insureds or prospective insureds. What this means is that we have our own resources that we are able to share with our clients that monitors the insurance market, which gives us guidance on trends and also allows us to focus on the reasons for pricing differences.
We understand there can be so many differences, such as limit variables, excess variables, cover extensions, cover exclusions, claims frequency, claims severity and risk variables. All of these things can distort the median rate, we provide terms on the basis of variable limits and excess options and use the same most common or closest to the nominated common amount for a certain profession for the data collection and median rate input. This means that we not only have guidance on pricing, we also have an understanding of common levels of cover for each profession.
What this means to you as insured is that you will have an idea of the market response to your profession, which is constantly evolving and being updated, it will also give you accurate information that you can work through with your clients in their engagement of your services, when they a requesting certain levels of cover.