Non-Life insurance is facing a lot of challenges ranging from fierce competition on the market or evolution in the distribution channel used by the consumers to evolution of the regulatory environment (Solvency II, IFRS…).
Pricing is the central link between solvency, profitability and market shares (volume). Improving pricing practice encompasses several dimensions:

• Technical: is our pricing adequate to cover the underlying cost of risk of my policyholders and the other costs we are facing? Which are the key variables driving the risk? Are they adequately taken into account in our pricing?
• Competition: at what price will we attract the segments that we target and price out those that we don’t want? Is the positioning of our competitors influencing our pricing practice?
• Elasticity: what (new) price are our existing customers prepared to accept?
• Segmentation: is our segmentation granular enough for our purposes?

The aim of this seminar is to present the actuarial/statistical techniques usually used in non-life pricing. This seminar is a strong introduction to these techniques and will be followed in the next few months by an advanced seminar of the EAA presenting new techniques that are being used.

Organised by the EAA - European Actuarial Academy GmbH in cooperation with the Hellenic Actuarial Society.

The seminar is specially developed for non-life actuaries or statisticians working in product development or risk management departments. A basic knowledge of non-life premium calculation mechanisms is useful but not necessary.

Attendees are encouraged to bring a laptop computer with R installed as well as some useful packages (all the information will be provided after subscription).

The seminar will alternate between methodological concepts, practical examples and case studies in order to ensure a comprehensive understanding of the techniques.

Participants will have the opportunity to apply in the R software concepts they will have learned in the theoretical sessions, using fictitious data. They will adjust GLM models, understand how results should be interpreted, perform statistical (significance) tests, etc.

A business game will be organised as follows: the participants will be separated in several fictitious insurance companies operating in the same market. Starting with their current tariff and positioning, each fictitious company will have to review its tariff taking into account its expected profitability (technical tariff), the objectives of the management (positioning), the tariff of the competitors (via a dispersion analysis) and the behaviour of its customers (elasticity to price changes).

A basic knowledge of the R software is useful. Some training material will be provided before the seminar to the participants needing an introduction to R so that they can go through it by themselves.

Samuel Mahy (Reacfin)
Samuel graduated as MSc. In Engineering (Applied Mathematics) with an additional minor in Economy and also holds a Master in Actuarial Sciences. He is a qualified actuary of the Institute of Actuaries in Belgium (IA|BE) and involved in the Reinsurance and Non-Life Workgroup of the IA|BE. He is the Head of the Non-Life Center of Excellence at Reacfin. Samuel has been active 5 years in the reinsurance sector where he was involved in reinsurance pricing model developments. At the same time he was also the main responsible of the UK market portfolio profitability follow-up. Samuel joined Reacfin in June 2010 as a specialist in Non-Life Insurance and Reinsurance. As a director, he is involved in various missions as in the modelling, implementation and validation of pillar I deliverables (standard approach and (Partial) Internal models), reinsurance optimization, model documentation or non-life pricing model development for several lines of business.

Xavier Maréchal (Reacfin)
Xavier is founder and CEO of Reacfin. He is one of the co-authors of: “Actuarial Modeling of Claim Counts: Risk Classification, Credibility and Bonus-Malus Systems” (Wiley, 2007). Xavier has obtained different academic degrees as: MSc. In Engineering (Applied Mathematics), MSc. Actuarial Sciences and MSc. Management. Xavier is a qualified actuary of the Institute of Actuaries in Belgium (IA|BE) and Member of the Non-Life workgroup of the IA|BE. Xavier has extensive experience in the actuarial field obtained during his 14 years as a principal consultant for many national and multinational insurance companies. He has gained a complementary experience in various fields going from Non-Life ratemaking and provisioning to life modelling and ALM. After several years of intensive modelling activities essentially in non-life insurance, Xavier works now as reviewer and mentor for consultants.