Company Market Share Analysis

Before You Begin

In this use case, Safety Insurance has provided you with UNICEDE/2 files that include market share information. The company cannot provide you with detailed exposure data. You must:

  • Determine the market share that the book of business comprises.

  • Design a reinsurance program to mitigate your potential losses.

Procedure

In this scenario, you might take the following high-level steps:

  1. Create the Safety Insurance company.
  2. Import the UNICEDE/2 files that the company provided.
  3. Create one or more reinsurance programs for the company, ensuring that, on the Program Options tab, you:
    1. Specify the Exposure Set you imported for the company as a target.
    2. Select Specified Market Shares in the Use list for the target.
  4. Run a loss analysis on the reinsurance program you created.
  5. Review the results of the analyses to determine the program that best mitigates your potential losses.

    • Touchstone Re compares company exposure data to AIR industry exposure data to compute the company's market share.

    • Touchstone Re multiplies the market share by the industry loss for each area or subarea, line of business, and event to calculate losses.

    • Market share analyses cannot account for the geographic distribution of risks in a subarea. For example, if risks in a subarea are concentrated near a hazard, Touchstone Re might underestimate losses for the subarea. Consequently, AIR recommends performing company loss file analyses instead, whenever possible.