We’ll cut through the complexity and help you to plan the optimal premium allocation schedule. We’ll also help you to present it positively to each business unit or location.

Allocating insurance premiums to individual business units can be as daunting as it is necessary. By its very nature, premium allocation is usually only needed in complex situations, with large insurance schedules protecting long lists of assets, possibly spread out throughout the world (with widely differing premium tax rates). It’s always time-consuming, and yet it needs to be completed rapidly after renewal.

However, we can help. With our tools and experience, you can simplify and accelerate the allocation of your insurance premiums across your business units or on a country-by-country.

Encouraging your business units

We understand that those responsible for risk management need to present the premium-allocation system to business units in the most positive manner, so that’s what we’ll help you to do. We’ll also help you to encourage more risk-management initiatives across your operating units, designed to drive down the total cost of risk in the medium-to-long term.

How we’ll approach your premium allocation

Of course, each approach is tailored to the individual client. But in general, we’ll:

  • review the key variables to be included in the premium-allocation model, such as your loss frequency and severity (and possibly capping it); exposure/value at risk; and risk quality/engineering, etc.
  • clean your data for loss and exposures while checking for consistency
  • develop a prototype model, with initial weighting factors (we’ll adjust this for every local area depending on your values insured, risk exposures, your claims history, plus the quality of local risk management)
  • test that prototype model before fine-tuning it (for example, using constraints to avoid unnecessary distortion from individual large losses; analysis of any loading for cost of capital)
  • Compare it with previous years’ premium allocation
  • Review any administrative issues (for example, the payment of local premium taxes, etc.).

Why talk to Alesco RMS?

  • We’ve helped many blue-chip and global businesses with working towards the optimal premium allocation
  • We don’t take a ‘one size fits all’ approach: since the work is complex and each client is different, we will design a solution around your own business
  • Thanks to our considerable experience and understanding, we can work quickly to deliver a rapid solution for you
  • We are specialist risk-management consultants, so we know how to approach each risk.

Please get in touch

If you’d like experienced support with preparing and presenting your insurance premium allocations, do call us. Our key contacts are listed below.

View our glossary of insurance terms

Premium Allocation Key Contacts