Show Me the Money
The share of premium an insurer receives for providing coverage during a specific period. It typically serves as the denominator in most insurance ratios.
What is earned premium?
The “moment of truth” when risk becomes reality; counting these is the earliest indicator of claims exposure.
What is FNOL (first notice of loss)?
A carrier improves recovery rates and subrogation referral times by modernising liability tracking, referral automation, and SLA monitoring within its core system.
What is ClaimCenter?
“Our top line is up 12% and I still can’t tell you if we made money on it.” She is asking about this scoreboard, not premium.
What is the combined ratio?
Today’s written premium becomes this next month.
What is earned premium?
Add the loss ratio, the LAE ratio and the expense ratio and you get this scoreboard of underwriting profitability.
What is the combined ratio?
Industry averages run 10 to 30 days for this measure, from FNOL to final settlement.
What is claims cycle time?
Inquiry handle time and new adjuster ramp time have decreased because procedures and coverage answers are now included in the claim file instead of on a shared drive.
What is ProNavigator?
“Winning a new customer costs us 10 to 25 times what it costs to keep one.” He is making the case to invest in this.
What is retention?
Cutting cycle time by rushing adjudication can raise the rate of these, wiping out the savings.
What are reopened claims?
The cost to investigate, evaluate, negotiate and settle claims, kept separate from the indemnity paid to the claimant.
What is loss adjustment expense (LAE)?
The percentage of transactions completed with no human touch; low values quietly inflate the expense ratio and make AI hard to scale.
What is straight-through processing (STP) %?
This system significantly reduces the time from actuarial recommendation to live rate by allowing actuaries to deploy models directly, without IT recoding. It also improves the loss ratio.
What is PricingCenter?
“By the time our rate is live, the indication is stale.” The Chief Actuary is describing this problem, which regulation builds in and slow IT makes worse.
What is rate lag? (accept speed to rate)
Because it reduces net incurred losses without touching premium, a better recovery rate flows straight into this ratio.
What is the loss ratio?
This ratio indicates how efficiently an insurer runs its business rather than how well it prices risk.
What is the expense ratio?
Of the claims a model flags, the share that turn out to be real fraud; a low number means SIU is spending its time on honest customers.
What is fraud precision?
STP rates for low-complexity auto claims have increased, even though no new adjusters were added. It’s not just the scoring model; it’s the product that moves the claim from first notice of loss to payment without any human involvement.
What is Autopilot?
Measures how effectively an insurer recovers paid claims from at-fault third parties — through subrogation, salvage, fraud restitution, and overpayment recovery.
What is the recovery rate?
Higher retention reduces the need to keep buying replacement business, which eases this ratio.
What is the expense ratio?
The ratio of net written premium to policyholders’ surplus is considered conservative at approximately 1:1. Ratios above 3:1 typically attract scrutiny from regulators and rating agencies.
What is the surplus ratio?
Total written premium divided by policies in force; rising with flat counts is real growth, falling with rising counts is not.
What is premium per policy?
Quote-to-bind rises because submissions are scored for appetite fit, and underwriters act on the best ones in a single workbench. Name both products.
What are Predict and UWCenter?
“Our combined ratio was 103 and we still turned a profit.” The CEO is leaning on this.
What is investment income?
Persistent combined ratios above 100% erode this, which in turn caps how much premium the carrier is allowed to write.
What is surplus (capacity)?