AssureNord is a property and casualty insurance company with around 3.8 million customers across Sweden, Norway, Finland, Denmark and the Baltic States. In early 2020, the company’s management team was presented with an underwriting challenge: how to maintain growth while ensuring profitability. AssureNord had historically relied on a portfolio view, an approach involving evaluating a company’s overall business portfolio rather than assessing the profitability of individual policies or clients (Parizas, 2024). With this approach, some policies may be priced at a loss, on the assumption that more profitable policies will compensate for the shortfall. However, this approach risks masking unprofitable segments through adverse selection, whereby unprofitable clients enter the risk pool and pay a premium that is too low to cover their expected claim costs. Furthermore, risk-adjusted pricing is important in order to incentivize insurance buyers to mitigate their risk. AssureNord’s management therefore sought to ensure that each client was profitable in and of itself.

• Introduce students to profitability considerations specific to insurance companies
• Introduce students to key insurance concepts, such as the combined ratio and risk ratio, and explain how they are calculated
• Introduce students to the importance of the underwriting process and its role in an insurer’s profitability and financial stability
• Develop students’ critical thinking skills regarding the factors at play when pricing insurance beyond extrapolating historical claims data
• Develop students’ communication skills so they can effectively present their pricing strategy to management