Report

Protection and Indemnity Rating Engine

The Marsh P&I Rating Engine provides an independent, fully modelled indication of a “fair” P&I premium for most types of P&I business. The modelling tool assesses realistic claims reserves and allocations to abatement costs.

The Marsh P&I Rating Engine provides an independent, fully modelled indication of a “fair” P&I premium for most types of P&I business. The modelling tool assesses realistic claims reserves and allocations to abatement costs. This enables Marsh Specialty brokers to challenge clubs’ pricing models and negotiate premiums harder for our clients.

What is the P&I Rating Engine?

  • Is a proprietary P&I premium modelling tool that has been built by Marsh using insurance industry standard actuarial and analytical techniques.
  • Provides a reliable independent analysis of all components of a P&I premium.
  • Is customizable according to individual P&I club rating structures.
  • Enables true comparisons between the premiums charged by different P&I clubs.
  • Provides a technically sound challenge to P&I club pricing.
  • Empowers negotiations on your next renewal.

How it works

  1. Deductions vary to an unexpected degree between the clubs from highly conservative to the apparently excessive (no club underestimates deductions).
  2. This often means underwriting results are impaired and true accumulated surpluses on individual accounts are understated (or deficits overstated), often leading to unnecessarily high premiums.
  3. The P&I Rating Engine models empirical data to calculate fair deductions for abatement and pool costs, and applies these costs to client data to show a true picture of the underwriting result, thus indicating a “fair” premium.

Benefits

  • We use the outputs from the Rating Engine to challenge the approach of the P&I clubs to underwriting our clients’ business.
  • And to secure premium reductions where they are due – they often are.
  • There is irrefutable evidence that the accumulation of surplus capital by the P&I clubs has been made possible by excessively defensive underwriting models.

Example Summary Overview

This is an example of the Fair Rate Assessment Summary from the P&I Rating Engine. It provides a snapshot view of a P&I Club rate in comparison to the fair rate.

To arrange a meeting to find out how your P&I rate compares against Marsh’s P&I Rating Engine, please complete the form.