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A Common Language: Building a Guide to Help Price International Property Coverage by Individual Risk

By John Buchanan  |  July 9, 2016

a common languageThe hardest part of insuring properties outside the United States isn’t usually obtaining the proper translation from another language. It’s often trying to get others, from the risk manager and broker, to insurer and reinsurer, to understand a common insurance language relating to pricing international property coverage by individual risk.

The principles are easy to remember. COPE, which stands for construction, occupancy, protection, and exposures, reminds us to ask certain questions:

  • How was the building constructed?
  • Who occupies it?
  • What is the security like?
  • What are the specific exposures in the building or neighborhood?

The challenge is how to answer those questions in a way that makes sense no matter what country your property is located in. That’s why ISO has been working with an international team of actuaries and underwriters on a potential solution: a paper that we hope will serve as a reference guide to help with pricing property by individual risk around the world. The paper, “Analyzing the Disconnect Between the Reinsurance Submission and Global Underwriter’s Needs,” is the result of a working party I led over the past two years from the Institute and Faculty of Actuaries’ General Insurance Research Organising Committee (IFoA-GIRO) and the Casualty Actuarial Society’s Casualty Actuaries in Reinsurance (CAS-CARe).

While reinsurance is featured in the title, the lessons from the paper can apply to both primary and reinsurance professionals seeking to understand the related principles of pricing property by risk. In addition to analyzing COPE, the paper looks at a wide range of topics in international insurance, including:

  • amount of insurance definitions
  • loss ratio estimation methods
  • usefulness of historical profiles
  • various price monitors
  • property catastrophe submissions

You can download a copy of the paper here. If you have any questions or would like more information about it, please feel free to contact me at or 201-469-2335.