Inland Marine Rating With Insbridge

CASE STUDY

Inland Marine is a type of insurance policy that indemnifies loss to movable or specialized types of property, historically developing as an outgrowth of ocean marine insurance. This category of insurance includes property coverage for construction equipment, medical diagnostic equipment, fine arts, solar panels and wind turbines, cameras and movie equipment, musical instruments, and a wide variety of other types of property. It is a very popular coverage for businesses and as such many Insurance Carriers offer this coverage. If you are a carrier wanting to provide this coverage or are porting over a legacy Inland Marine product into a new system this can seem daunting considering all the data needed for rating the Inland Marine line of Business.

Insbridge is an enterprise standalone rating engine provided by Oracle. It enables customers to quickly and easily create and deploy rating and rules programs using a codeless UI.

Problem:
Second Phase was hired by an Insurance Carrier to port a legacy Inland Marine product into Oracle Insurance Insbridge Enterprise Rating (Insbridge). We had to determine what the best way was to build an Inland Marine rating program in Insbridge given the following high-level requirements (which are probably common to most insurance carriers):
• Need to produce Actual Premium for base coverages
• Need to produce premium for Additional Coverages (e.g. Professional Fees, Climate Control Coverage, etc.).
• No Need to be able to support Experience Rating.
• No Need to be able to support Schedule Rating.
• No Need to be able to support Composite Rating.
• No Need to be able to support versioning of logic by State.

Category Structure
Category structure is extremely important in Insbridge as it determines relationships between rating objects and can dramatically effect rating performance as well as program maintenance. For this project, we followed a simple category structure that would allow the program to run efficiently.

Policy
Policy/InlandMarineLine
Policy/InlandMarineLine/Comodity
Policy/InlandMarineLine/ContractorEquipmentItem
Policy/InlandMarineLine/MiscellaneousAtriclesItem

We were told that state or location would not impact the rates used. Additionally, there was no need for Premium aggregation at the state or the location level. Finally, there was no need for multiple types of premium generation or experience rating.

Not all Inland Marine products are this simple. Sometimes there needs to be an additional category level to allow for much more complex rating programs. Multiple states may be needed to be rated differently. Additionally, there may need to be class coverages that require separate rating and pricing. In those cases, we would implement the program differently and therefore would use a different category structure to allow for granular rating needs.

Lessons Learned
There were in depth discussions with the Business Team regarding best category structure to use to ease integration with the rating engine. Based on those original discussions, the Additional Coverage category was originally a child of the Inland Marine category since those coverages were considered Policy or Line level coverages. However, we later decided that a downstream system needed these coverages to be sent separately instead of a generic single category that apply all the rating functionalities. We not only need to consider how the rating data will be shown on the rating and quoting screen we also need to consider how the rating results will be used and stored in other applications in the entire insurance workflow.

Summary
Building an Inland Marine program can be challenging. However, using Insbridge with the category structure and table setup noted above allowed us to easily construct a program that tackled common concepts related to Inland Marine. We decided to go with a very simple rating structure that would allow for a very efficient rating, ease of maintenance, as well as provide excellent rating performance. Insbridge allows for complex rating structure if they are needed. However, when the requirements do not force the user to build a complex structure, Insbridge is flexible enough to allow for much simpler and more efficient category structure.

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