Identify Affected Segments
Scenario: The Premium Displacement report shows the total portfolio impact of a rate change, but the distribution needs to be understood, or one segment is showing a disproportionately large impact compared to the rest.
Goal: Use the Segment Analysis report to break down premium displacement by the dimensions in your KPI profile, isolate the affected segment, and determine whether the concentration is expected or indicates an unintended interaction with other rating factors.
Prerequisites
- A scenario with a status of Executed or Partial Executed.
- A KPI profile configured with the dimensions relevant to the analysis. If the profile is missing required dimensions, open the KPI Builder from the platform navigation, edit the existing profile, and add the required dimensions before proceeding.
- The Premium Displacement report has already been reviewed and the total displacement figure is available as a reference point. Refer to Read a Premium Displacement Report to know more.
Step 1 - Open the Segment Analysis Report
- From the scenario's reports, select the Segment Analysis report.
- Confirm the KPI profile applied includes the required dimensions. If the wrong profile is applied, switch to the correct one using the profile selector within the report.
Step 2 - Select the Primary Dimension
Choose the first dimension to segment by - start with the dimension most relevant to the analysis objective or the one where the disproportionate impact has been identified.
- For a state-specific filing: start with State or Territory
- For a risk-based analysis: start with Driver Age or Driver Class
- For a coverage-level analysis: start with Coverage Type
Step 3 - Identify Disproportionate Segments
For each segment, compare the displacement against the portfolio average:
- Note the overall portfolio displacement from the Premium Displacement report.
- Identify any segments where the displacement is materially higher or lower than the portfolio average.
A uniform rate change like a 5% base rate increase should produce relatively consistent displacement across segments. Large variation between segments often indicates an interaction with other rating factors - for example, a territory factor that amplifies the base rate change in certain zones.
If a segment shows near-zero displacement while others show the expected impact, the rate change may not be applying to that segment - check the Rate Comparison report to verify.
Step 4 - Determine Whether the Impact Is Expected
For any segment showing disproportionate impact, consider the following:
| Observation | Likely Explanation |
|---|---|
| The segment has a high concentration of policies near the cap threshold | Capping rules may be limiting the impact in other segments, making this one appear disproportionate |
| The segment has a different mix of rating factors | An interaction between the modified table and other rating factors may be amplifying the impact in this segment |
| A large Charged vs Current gap within the segment | That segment may have been historically priced differently from the current rate structure |
Step 5 - Drill Down Into Problem Segments
For any segment flagged as disproportionate:
- Apply a filter to isolate that segment.
- Add a second dimension to further break down the displacement within it - for example, if Territory 12 shows disproportionate displacement, add Driver Age as a second dimension to see whether the impact is concentrated in a specific age band within that territory.
- Note the Charged, Current, and Proposed premium figures for the segment.
Step 6 - Export the Report
Export the Segment Analysis report and prepare a summary of segment-level findings for the actuarial review. Regulators and pricing committees will ask about segment distribution.
Next Steps
| Finding | Action |
|---|---|
| Displacement is evenly distributed - no segments stand out | Results are consistent with the rate change assumption. Proceed to export and filing preparation. |
| Impact is expected given the rate structure | Results are consistent. Proceed to export. |
| Impact appears to be caused by a rating factor interaction | Refer to Identify Rate Factors Driving a Change to investigate |
| Displacement is concentrated in segments central to the filing | Consider testing a revised proposal. Refer to Compare Two Rate Change Proposals |
Having trouble? Refer to our FAQs or Troubleshooting guide to know more.