Authors: Dr Alireza Daghighi Asli, Dr Ahmad Reza Ansari, Azadeh Bahador, Azin Sadat Ostadramezan, Fatemeh Atatalab, Zahra Bardal
Coordinator: Property and Casualty (Non-life) Insurance Research Group
In this study we propose consulting rates by exploiting code of practice and resolutions of supreme council of insurance, market information, comments of experts and practitioners, calculations and experience of other countries in rate-making/insurance pricing. This helps companies, active in the insurance industry use the consulting rates to receive more equitable premiums from their customers while taking into account their interest.
In addition to considering and evaluating existing literature and past experience, in order to systematize consulting rates the Insurance Research Center (IRC) has taken major steps some of which are employed in rate-making/insurance pricing for the first time. Among all the aforementioned steps, the most important ones, in different fields, are listed as follows:
Fire Insurance and Consequential Risks: different regions were reduced from 5 seismic risk categories to 4 and this classification is based on the last Iranian seismology studies and scientific research findings. Risk categories in fire insurance were increased from 9 to 12 categories. The seismic risk category was increased from 236 to 429 townships according to the last administrative divisions of Iran. In this consulting rate, for the first time, the islands in Persian Gulf, in addition to mainland, were considered as a risk category. Number of consequential risks and relevant rates were increased from 11 to 24.
Cargo Insurance: in cargo section, the risks were classified based upon the mode of transportation including aerial, terrestrial, railroad and marine as well as risk category and coverage types of closes A, B, and C, while in the past, this classification was based on W.A conditions and the rates were declared only for marine transportation and adjusted regarding other modes of transportation. In cargo section, for the first time, the rate was declared for numerous goods.
Auto Insurance – Collision: in discount section, new vocational groups were added. Some automobiles, to which no rates were assigned in the past, were added to the list. Franchise was declared in table with different rates separated by all types of automobile and motorcycle. This is different from the past in which franchise has been simply declared 10% for all items.
Auto Insurance -Third Party Liability (Compulsory Third Party Insurance): in this section the increase of financial commitments up to 10 percent of loss of life commitments was proposed due to low coverage in the financial section and financial excess provided by all insurance companies.
Voluntary Third Party Motor Insurance (Excess): different discounts were proposed in financial and loss of life excess coverages with regard to the level of insurance companies' loss.
Medical Professional Liability Insurance: the medical professional liability was extended to all available medical specialties which some of them were missed in past rates. The discount categories were increased based on the insured loss records.
Paramedical Professional Liability Insurance: the paramedical professional liability was extended to all available disciplines in this field and the rate is assigned to each one for them.
Export Credit Insurance: economic – political risk table of the countries were studied based on the last developments in the world and consequently some countries were added and the risk category of many countries was changed.
Keywords: Consulting Rating, Fire Insurance, Cargo Insurance, Auto Insurance, Medical Professional Liability Insurance, Paramedical Professional Liability Insurance, Export Credit Insurance