Personal Lines Pricing: From Judgement to Fact

The event of an insurer undertaking to write a new line of business is not, under the most optimistic circumstances, a common occurrence. Such comparative rarity precludes the uniform accumulation of statistical observations, and, therefore, analysis of the common attributes of such ventures is not feasible. The most recent past has witnessed a vigorous new interest in the marketing of personal lines business by various insurers and especially by those whose traditional expertise has been in the life and accident and health lines. The fact that life insurers dominate this renewed interest is not critical to the concept of this paper. The intensity of this interest, however, has served to highlight certain problems with the pricing of the insurance product which, not only the new insurer, but any insurer expanding its portfolio must face.