Think you know what’s going on geographically in your portfolio?

At Pinnacle, we have found most insurers don’t. Rather than using finer detailed boundaries based on actual experience, most insurers still use definitions based on county boundaries or outdated city and street definitions. As a result, too many insurers are missing opportunities to more appropriately price their portfolios and gain competitive advantage.

Summit^® changes all of that. By developing geographic boundaries based on underlying experience, insurers of all sizes can easily and efficiently glean information to define new territories. For smaller insurers, Pinnacle can help you supplement your data with industry experience in most states to provide increased predictive value for territorial analysis.

Summit^® applies user-selected smoothing techniques to blend information from surrounding geographical areas rather than using statewide information. The software then develops numerous sets of indicated territory boundaries by grouping or clustering areas of similar experience. This dual process of “smoothing” and “clustering” is incorporated into Pinnacle’s software application on a Visual Basic platform.

Because Summit^® uses an insurer’s actual loss experience, the analysis provides a portfolio-based perspective on territorial boundaries. Summit^® can group geographic areas into contiguous territories where adjacency is desired or into noncontiguous clusters where it is not. Summit^® also creates a variety of territorial scenarios in one run. By including an insurer’s current definitions and rate levels, the software provides an easy-to-understand spreadsheet displaying a distribution of rate change impacts statewide as well as specific impacts by zip code.

Summit^® is compatible with many external mapping software packages. This allows for easy development of rate impact maps for each indicated scenario and displaying indicated definition boundaries.

There is no doubt about it. For those who want to review and segment their risk portfolio to make better-informed underwriting and pricing decisions, this is must-have software. There are other benefits as well. Properly-configured territories using ZIP codes and other, smaller building blocks can reduce misclassifications by agents and underwriters and gain competitve advantage in today’s increasingly sophisticated marketplace.

How Summit^® Works

Summit^® innovatively approaches developing new rating territories by smoothing and clustering an insurer’s experience or the output of various catastrophe models (hurricane, severe thunderstorm, or earthquake). Specifically designed for zip code defined data, Summit^® can also utilize more refined data levels such as census blocks or tracts.

Summit^®'s smoothing feature provides the flexibility to allow users to select the smoothing equation and the credibility standard to specify how far to “reach out” to surrounding zip codes and how much the additional information contributes to smoothing of the local data. The clustering process can be performed using contiguous or non-contiguous areas based on dollar or percentage differences. The clustering output provides graphically displayed diagnostics to assist in determining the optimum number of territories from a statistical standpoint.

Summit^® has been recently-updated with NEW features including:

• Rate change impact analysis that reveals rate swings
• Analytical tools that highlight optimal territory cluster sets
• Output files for use with external mapping software products
• Greater data and user flexibility with more smoothing and clustering options
• Seamless data flow between smoothing and clustering processes

Why Wait?

For more information about Summit^®, please contact Chris Carlson by
writing ccarlson@pinnacleactuaries.com or calling Pinnacle’s Columbus, Ohio
location at (614) 734-8366.

Learn more about Pinnacle's Territorial Definition Analysis services.

Download Summit Flyer (PDF, 138 kb)

Download Summit Brochure (PDF, 224 kb)