EMB Introduces New Approach for Developing
~ The New Technique Helps Insurers Build Proprietary Vehicle Symbol Definitions, Produce More Accurate
Rates, and Reduce Cost ~
August 30, 2010 03:04 PM Eastern Daylight Time
SAN DIEGO--(EON: Enhanced Online News)--EMB, a global property and casualty (P&C) consulting firm, has
developed a new technique for insurers to build proprietary vehicle symbol definitions based on their own loss
experience from personal automobile policies.
Vehicle symbols are an aggregate categorization of vehicle, policy and operator characteristics – a commonly used
tool that helps insurers determine personal automobile insurance rates. Traditionally, most insurers have relied on
third-party vendors to provide vehicle symbol assignments.
The new, cutting-edge EMB innovation allows insurers to build their own vehicle symbol definitions by combining
loss experience history and external vehicle data with a sophisticated dimensional “smoothing” routine to estimate the
expected loss costs for each make and model. By using the technique, insurers can now group vehicles into a more
predictive and refined set of vehicle symbols.
“EMB’s methodology develops highly credible and segmented symbol definitions. This method produces a significant
reduction in subsidization and cost to the insurer, and adds a reliable layer of predictability for loss exposures,” said
Serhat Guven, senior consultant for EMB in North America.
The new technique has been tested in the U.S. and Canada, and research has shown a significantly higher level of
predictability insurers used the EMB approach versus commonly used symbols developed by a third-party vendor.
“It’s all about producing accurate rates. In one particular case, when an insurer implemented the EMB technique, it
was able to reduce its average subsidy by nearly 50 percent,” Guven added.
An EMB University WebEx session on the new vehicle symbol innovation can be heard at: