MGA pricing actuary: technical pricing and rating models

Are you charging the right premium?

The insurance market is increasingly complex, and it can be difficult for MGAs, Lloyd's syndicates and insurers to know whether they are charging an appropriate premium for their policies. Capacity providers are placing more emphasis on data and analytics, and many have their own teams of pricing actuaries reviewing the delegated authority business they support. Perrenial helps MGAs and Lloyd's coverholders level the playing field by bringing independent, technical pricing expertise to their own portfolios.

Perrenial is a London general insurance (non-life) actuarial consultancy. Our pricing work is led by Asad Khalil FIA, Managing Director and founder, who has significant experience across technical pricing, reserving and risk financing.

Pricing large individual accounts

We help insurers and MGAs price large individual accounts. Using your historical loss experience, we build frequency and severity distributions to arrive at a gross loss distribution for the account. The insurance structures your business wants to explore are then overlaid on that distribution, so that prices can be derived for different layers and structures.

We use stochastic modelling software and technical pricing expertise to help you understand the right amount of premium to charge for your large accounts, and to give your underwriters a clear, evidence-based view of the risk.

Building and developing rating models

We also help insurers and MGAs build new rating models and develop existing ones. We work closely with your underwriters and use your historical claims and exposure information, so that the models are statistically robust and also commercially viable. A rating model has to work in the hands of the people quoting business every day, not just on paper.

What our pricing work delivers

Pricing and portfolio performance go together

Pricing is most effective when it is informed by how your portfolio is actually performing. Pricing work often sits alongside our binder and coverholder portfolio analysis, which projects forecast gross ultimate loss ratios and identifies the individual policies or risks driving adverse claims experience. Together, they give you a consistent view of where the book is today and where rates need to be.

Where the question is how much risk to retain rather than what to charge, our (re)insurance programme design optimisation work uses the same frequency and severity modelling to compare retentions, limits and aggregates.

Who we work with

If you are preparing for a capacity renewal, you may also find our article on what data Lloyd's coverholders should be providing to capacity providers useful.