Akur8, an InsurTech provider of actuarial technology, has detailed a new capability designed to tackle one of the less visible risks in insurance pricing: making sure the right rate reaches the right policy at the right time.

At first glance, changing an insurance rate sounds straightforward. A new rate is approved, tested and deployed, and the old one is replaced. In practice, insurers can have multiple rate versions running across products, states and coverage types, creating plenty of opportunities for something to go wrong between the pricing decision and its arrival in production.

Akur8’s Effective Date Routing capability, built into its Deploy insurance rating engine, is designed to address that problem by determining which rate version should apply to each transaction.

Instead of overwriting an existing rate when a new version goes live, insurers can add the new rate with a defined effective date. Deploy then uses two dates to determine which version should be applied: a reference-date policy date and a rate as-of date, which ties a transaction to the version that was live when the quote was issued.  The reference date, usually the policy effective date, binds to the version’s effective date, the rate as of date binds to the activation date.

Akur8 uses a New York Commercial Property policy to illustrate how this works. A broker quotes a policy on 2 February (the rate as of date) for a policy effective on 15 March (the reference date). If the broker binds the policy two weeks later, after another rate version has gone live, the rate-as-of date keeps the original quote on the rates it was priced against.

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