Insurance Cost & Risk Optimisation · Technical White Paper
Insurance Cost & Risk Optimisation
A technical method for comparing insurance programmes where the structures are not directly comparable — scenario analysis, cover challenge, claims-service evidence and the separation of quoted price from conditional mechanism.
3 · Programme architecture
Why a premium-only comparison would have been incomplete
Scroll table sideways →
| Programme question | Evidence issue | Technical significance |
|---|---|---|
| Are all active sections necessary? | Multiple sections and separate policies existed across the programme. | Requires mapping risk to section before removing or consolidating anything. |
| Is the same liability exposure insured twice? | The alternative broker flagged possible duplicate public-liability placement. | Could indicate avoidable premium or intentional layering. The policy wording has to decide. |
| Are high-value solar assets broadly protected? | Some solar equipment appeared under fire and perils treatment only. | A lower premium is not a saving if accidental-damage exposure is unintentionally excluded. |
| Are portable devices insured only at the premises? | The incumbent challenged the alternative portable-equipment rate and scope. | Territorial and away-from-premises wording was central to whether the saving was even valid. |
The schedule listed solar systems, batteries, inverters, panels, cabling and related infrastructure under property sections — asset-level detail that became material once cover breadth was questioned.
4 · Scenario analysis
Why one headline price was not available
Motor was both a major premium driver and a material claims category, so the pack tested the economic result under several structures rather than presenting a single price. The governing distinction is between a conventional annual premium and a deposit-based fleet mechanism.
The incumbent annual position provides the baseline and the common denominator for every public percentage, because it is the only one that requires no assumption about future claims.
4.2–4.4 · The four structures
What each one costs, and what it depends on
Scroll table sideways →
| Structure | Mechanism | Result | Depends on |
|---|---|---|---|
| Incumbent annual | Full annual premium | Baseline | Nothing — which is why it is the denominator. |
| Incumbent 70/30 deposit | 70% paid as deposit; the remaining 30% becomes payable if the claims threshold is exceeded | Nil to 30% | The claims year. Tested against two real years, with opposite outcomes. |
| Alternative conventional | A lower fixed annual premium | 21.8% lower | Nothing. The strongest motor comparison for public reporting. |
| Alternative 80/20 deposit | 80% deposit against a negotiated premium; the remaining 20% linked to claims performance | 36.1% lower in the tested scenario | Claims staying within the structure. Labelled modelled and conditional. |
The procurement point this engagement demonstrates
A deposit model does not create a fixed discount. It creates a claims-sensitive economic mechanism.
Calling the maximum deposit difference a saving, without showing the threshold test, would materially overstate certainty. In the higher-claims year tested here, the incumbent structure produced no annual saving at all — the full remaining balance became payable.
4.5 · Administration mechanics
A benefit that still has to be assessed
The alternative broker proposed fleet treatment on a non-specified basis up to a stated per-vehicle limit, with periodic declarations. The stated rationale was to reduce the risk of a newly acquired vehicle sitting temporarily outside cover because it had not yet been individually notified, with a single fleet rate and simpler administration as the commercial advantage.
That administrative benefit is real and is not free of conditions. It has to be assessed against the declaration obligations, the per-vehicle limit, and whether the client's own fleet controls can actually meet the declaration cycle.
6 · Portable equipment
The cover question came before the price question
Portable electronic equipment produced the largest rate movement in the engagement and also the sharpest disagreement between brokers. The incumbent argued that movable laptops and tablets attract materially higher market rates, and queried whether the alternative rate could genuinely provide all-risk-style mobility.
The prospective broker clarified that laptops fell within portable electronic equipment under Business All Risks and electronic-equipment treatment, and produced schedule evidence for the proposed placement.
The review tested whether movable equipment remained covered away from the insured premises rather than assuming price equivalence. Only once that was answered on the schedule was the rate difference accepted as a saving.
13 · Review methodology
The sequence, and why its order matters
Reconstruct
Rebuild the programme from schedules rather than from renewal summaries.
Map
Map risk to policy section, across every placement, before proposing any consolidation.
Analyse claims
Separate frequency, severity and service-turnaround evidence. Financial loss history is not service performance.
Benchmark
Obtain alternative pricing and wording on a like-for-like basis, noting where structures are not directly comparable.
Challenge cover
Interrogate scope, territory and exclusions before accepting any rate difference as a saving.
Model scenarios
Where a mechanism is conditional, test it against real claims years rather than publishing its maximum.
Due diligence
References, complaint material and claims-service evidence form part of supplier evaluation alongside price.
Conclusion
What the client can act on, and what they must decide
The programme produced one unconditional quoted result worth acting on directly — 21.8% on a like-for-like conventional motor premium — and a negotiated portable-equipment position that survived a cover challenge on the schedule.
It also produced a set of conditional scenarios reaching 41.8%, which are arithmetic rather than price, and a group of non-price findings with no percentage at all: possible duplicated liability cover, solar assets that may be protected only against fire perils, an intermediary chain worth scrutinising, and no cyber placement in the programme at all.
Presenting those three categories as one number would have been easy and would have told the client nothing they could use.