Comparing Apples and Oranges
The purpose of Insurance Policy Metrics (“IPM”) is to compare the relative value of different insurance polices by a numerical evaluation using claim simulation to determine coverage and payment of losses relative to premium amount.
IPM reviews the cash inflows and cash outflows for various types of claims (high risk, moderate risk and low risk claims) for coverage and claim payment of each insurance policy. The relative value of different insurance policies are evaluated numerically. The IPM Index is the ratio of Cash Inflow/Cash Outflows. A lower index is more favorable.
Company Policy Coverage Rating
We provide a standardized method and numerical rating system of evaluating coverage, projected claim payment and premium of different insurance policies using a statistical sampling of actual accounts based on over 25 claim (projected probability and severity) simulations. for cyber insurance, to provide consistency, cyber attack modeling and simulation is the same for all insurers and is based on an account’s business segment, probability of attack, security protection, revenue size, geography, number of personal customer/client/patient records and number of employees. Information is obtained from the policy declarations and the application. The insured is not identified.
An IPM index allows an insurance broker to obtain an individual account comparison and numerical rating factor of each insurance policy of different insurers for a specific account based on actual quotations. For example, over 50 companies are evaluated including 25 claim (projected probability and severity) examples for each company.
*Insurance Policy Metrics is patent pending with the United States Patent Office (USPO)
Insurance Policy Comparison
A policy comparison by reviewing wording is subjective and the significance of different wording, (insuring agreement, definitions, terms and conditions, exclusions) while important is hard to weigh. The IPM allows a user to calculate various twenty claim simulation examples utilizing the quoted premium. For certain policies, the same insurer based on premium may have a more favorable IPM index if claim risk/amounts are high and less favorable IPM index if claims risk/amounts are low. In other instances, an insurer based on premium may have a favorable IPM Index for both high claim risk/amounts and low claim risk/amounts. The IPM Index will demonstrate relative value for each case.
How to Compare:
It depends and the IPM index can help a user make a decision. Users can access IPM through our online portal. An account policy analysis and a group account analysis is available.
Important: Potential losses are never known with certainty, Generally, in retrospect a large loss payment and high premium is “more favorable” if you knew with certainty a loss would occur. However, you do not know and cannot predict the future. The Insurance Policy Metrics Index enables a user to weigh the significance of premium vs. coverage at the time of insurance purchase.
Insurance Policy Metrics (“IPM”) Relative Value
Total Cash Outflow = Premium Amount + Retention/Deductible/Co-Payment Amounts + Amount Not Covered
Total Cash Inflow = Paid Claim Amounts + Legal Expenses + Fines + Penalties + Other Paid Amounts
Relative Value of Insurance Coverage = Total Cash Outflow/Total Cash Inflow
*On a relative basis the higher the number the better value of the coverage