Location groups and reinsurance
Location groups provide a way to group locations that are located near each other. A insurer can use location groups to help assess their total risk for a given location.
An insurer can provide coverage on different policies that are considered a single risk for reinsurance. These coverages can include:
- Multiple stores within the same shopping complex
- Multiple offices within a large office building
- Multiple apartments or condominiums within same building
For example, an insurer has commercial property policies for two different accounts. The properties in these account are located close enough to each other that a single fire could affect both locations. When assessing the total potential risk, the insurer would like to know about the close proximity of these two, and possibly other, locations within the range of a single event.
In PolicyCenter, you can search for all risks of a designated type that are within a specified distance from a central location. You can combine the nearby risks into a location group.
In the default configuration, location groups simply group locations. You can use and configure location groups for a variety of purposes including:
- For generating reports about a location group.
- For underwriting rules that check whether the sum of total insured value of all risks in a location group exceeds a threshold. PolicyCenter raises an underwriting issue if the value exceeds the threshold.
See also