A shift in the pricing aspect of th...

A shift in the pricing aspect of the private-passenger auto operating type is sparking great interest. This phenomenon, called micro-segmentation, involves radical expansion of price points for a market basket of policyholders based forward predictive modeling applications and external databases. For example, a carrier that previously had 100 different rates for a certain stake of policyholders may today have as many as 400 to 500 different rates for the same cluster

From an actuarial viewpoint, expansion of price points creates a better match between risk and price as predictive prototypes refine traditional rating plans for previously unaddressed differences