Umbrella indicated rate change

[Ben Kenobi]

My boss wants one. I'm looking at 16 years of data. We've had fewer than 30 claims most years, and severity variance is high--in other words, your prototypical low frequency, high severity line of business, with a nasty long development tail to boot. Any ideas or pointers to appropriate papers?

[Franchise]

Umbrella pricing is similar to pricing layers of reinsurance. Perhaps some of the reinsurance papers on Part 9, or even the Pinto/Gogol paper on Part 6 might help.

As an aside, I had the fortunate advantage at my last company that we predominantly wrote umbrella policies over our own underlying policies, so I could calculate some rough "ground up" losses and develop those.

[Ben Kenobi]

As an aside, I had the fortunate advantage at my last company that we predominantly wrote umbrella policies over our own underlying policies, so I could calculate some rough "ground up" losses and develop those.

That's not an aside, that's a good idea. We're doing the same thing. Thanks!

[Franchise]

Well, it was an aside because I didn't know if your company had the same practice on umbrellas that we did, but I'm glad it helped. :)