Most currently used PC performance measures only look at a one year proifitability and retention for a whole portfolio without taking into account the multi-year angle and the various different dynamics on individual customer level:

-       Aging of the customer and the related change in risk, premium and retention (incl. company’s renewal strategy)

-       Underwriting cycle and the company’s strategy to react to this

-       Cash-Flows, investment return, expenses and taxes

Without a proper measure we can't assess a portfolio during the duration of the whole contract and we can't understand how different strategies influence short, medium and long term goals, e.g. which customer doea a company prefer: one with an expected profit of 20$ and an average duration of 5 years versus an expected profit of 10$ over 12 years.

This session describes how we can construct a measure that can allow for all of the above and how this then can be used in in various different business cases like

- making smarter pricing decisions and assess different strategic pricing options

- having a much more detailed understanding of the future development of your business for planning purposes

- gives a specific value to a whole portfolio (e.g. for M&A purposes)

For the construction of this measure we need various inputs and assumptions and we will show how this sensitive this measure will react to changes to these inputs and to the change of the environment. We will show a practical example under different scenarios and show that the measure is reacting as anticipated.