New data-driven index tracks changes in premiums nationwide

The report measures rates for personal auto and property lines, and will be released on a quarterly basis

New data-driven index tracks changes in premiums nationwide

Insurance News

By Alicja Grzadkowska

The analytics market is expected to grow in the next five years, and while information on customer behaviour is useful for insurance companies, a new metric is now available that directly helps brokers.

Applied Systems has launched the Applied Rating Index, which measures average premium rates for personal auto and property lines of business across the country and will be released each quarter. The ongoing report shows by how much premiums have changed from quarter to quarter in each province.

The findings for the most recent quarter reveal that in Q1 of 2018, average premiums for both personal auto and property lines increased when compared to the same quarter last year. In fact, each province saw an increase in both lines, except for personal auto in the Atlantic region – where one province is currently undergoing a review of its auto insurance – and personal property in BC.

The value to the brokers lies in being able to see how insurance premiums are changing every three months, which they can then pass along to their customers.

“They’ll be able to better inform their clients of what’s coming, what are the trends and potentially make decisions on remarketing or requoting certain clients based on what they see from the index,” said Stephane Lacasse, Applied’s vice president of product management for Canada and rating products.

For insurers, knowledge is power, too.

“They can see a trend overtime of how insurance in general is going, so it’s not going to be specific to their actual rates, but they can see the industry at-large [and] how things are moving from a consumer-facing quoting perspective,” explained Lacasse.

The data in the index represents 80% of the brokerage market in Canada and 1.3 billion quotes completed from the last decade, though plans for the index were only devised at the end of 2017.

“We sarted to put this concept together to try to see with the data that we have – and in our database, our rating engine has quoted over 1.3 billion quotes over the last 10 years – so we were trying to see if there was any value for us to put something to the market that can help represent what’s happening in the insurance quoting industry from a Canadian market at-large,” Lacasse told Insurance Business.



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